SOUTH Africa's business confidence index rose to a 10-month high of 85,5 points in September from 83,0 in August, adding to evidence the economy may be recovering from its first recession in 17 years.

SOUTH Africa's business confidence index rose to a 10-month high of 85,5 points in September from 83,0 in August, adding to evidence the economy may be recovering from its first recession in 17 years.

But index sponsor South African Chamber of Commerce and Industry (SACCI) warned yesterday that a number of risks, including South Africa's twin deficits - fiscal and current account - could hamper a revival.

The index showed that confidence in the majority of sub-indices rose on a month-on-month basis, suggesting that sentiment should continue improving in the medium term. This is in line with a jump in manufacturing activity in September.

However, SACCI said markets may be too optimistic about the strength of the global economic recovery, and that South Africans should also be wary of the government's growing borrowing needs and the continued shortfall on the current account. - Reuters