Local economy may experience growth in 2017

When the South African Reserve Bank (Sarb) revised its growth expectation for the country’s economy for 2016 to 0% last month, no one seemed surprised.

But independent economist Roelof Botha believes the picture may not be all bad.

Speaking at the Momentum Mindshift conference, Botha was adamant: “This economy is not going into recession I can guarantee that,” Botha said. “Next year could be a bumper year and we could grow at more than 2%, even 3%, coming off a low base.

“After six bad years, it seems we are in the early stages of the next commodity boom.

“Even though mining is less than 10% of the country’s GDP, it has a pervasive supply chain.”

The first three months of 2016 saw the largest quarterly demand for gold in history.

Botha believes that although the rand has reacted negatively to the news around the Hawks and Finance Minister Pravin Gordhan, it is in a strengthening phase that is positive for inflation.

Government’s borrowing requirement as a percentage of gross public debt has dropped from 19% to 5%.

In addition, tax revenues are growing, government is still spending on infrastructure, tourist arrivals have increased significantly, manufacturing volumes are improving, mineral sales are up and retail sales are positive.