South Africa Business Confidence Rises in July as Inflation Stays High

South Africa's business confidence improved slightly in July 2026, according to the South African Chamber of Commerce and Industry. The business confidence index rose to 125.4 from 123.5 in June. Despite this improvement, headline inflation remains high at 5.0 percent, driven mainly by transport costs and fuel price increases. The South African Reserve Bank kept its repo rate unchanged at 7.0 percent, despite a 25-basis-point hike in May.

Producer price inflation eased slightly to 7.5 percent in June, but remains above the 3 percent target set by the Reserve Bank. Households expect prices to rise by 6.0 percent over the next year, and by 9.1 percent over five years. The RMB/BER Business Confidence Index fell to 39 in the second quarter of 2026, just below its long-term average of 40.

The decline in business sentiment is attributed to weak domestic demand and global energy shocks. The conflict between the United States and Iran has contributed to higher energy prices, which are impacting trade and spending patterns. Despite the modest improvement in business confidence, the tight monetary policy and high inflation continue to squeeze firms and households in South Africa.