(Bloomberg) -- The number of South Africans optimistic about the country’s future has doubled, encouraged by the formation of a business-friendly coalition government and more than six months of no power cuts, a survey shows.
According to a poll published by Ipsos on Thursday, four out of 10 people surveyed believe that the country is on the right track, compared with 20% in April.
A so-called government of national unity was formed after the African National Congress lost its parliamentary majority in May elections for the first time since taking power in 1994. Ahead of its formation, many were concerned that the ANC might align with the left-leaning Economic Freedom Fighters and former President Jacob Zuma’s uMkhonto weSizwe party.
While foreign investors might still be wary of investing in South Africa, local sentiment is more positive, Ipsos said in a statement.
“A growing proportion of South Africans have a definite sense of hope and confidence in the country’s new trajectory,” Ipsos said. “The shift in public sentiment reflects the tangible progress made during the negotiations and foundation of the government of national unity.”
Since the formation of the GNU, the rand has gained almost 5% to the dollar, local-currency bonds have outpaced all peers in an emerging-market index, and the Johannesburg Stock Exchange has hit successive record highs.
Other factors that contributed to the improved sentiment include South Africa surpassing 150 days without power cuts and signs of easing inflation pressure “suggesting that the country may be on the cusp of a long-awaited period of economic growth,” Ipsos said.
South African Reserve Bank Governor Lesetja Kganyago said separately on Thursday that the inflation rate could fall below 4% in coming months, creating more room for policy easing after the central bank cut interest rates in September for the first time in four years.
Still, key concerns among those surveyed include unemployment, violent crime, inflation and social inequality, Ipsos said.
Finance Minister Enoch Godongwana will deliver the nation’s first medium-term-budget policy statement on Oct. 30 since the coalition government was formed. The policy priorities it outlines and updated economic forecasts will be closely watched by investors.
--With assistance from Colleen Goko.
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