SA’s Q2 GDP growth rate unsustainable
South Africa’s GDP growth’s unlikely to be maintained at levels achieved in the second quarter when the economy emerged from a recession, central bank deputy governor Daniel Mminele said yesterday.
The economy grew 2.5% in the three months to the end of June, after contracting 0.6% in the first quarter and 0.3% in the final quarter of 2016. But the outlook remains bleak.
“We may not be in a recession, but it is quite doubtful that the 2.5% momentum of the second quarter can be sustained.”
Finance Minister Malusi Gigaba on Wednesday lowered the economic growth forecast for this year to 0.7% from an earlier estimate of 1.3% – falling further below the government’s target of 5.4%.
Despite the weak growth, Sarb is taking a cautious approach to further monetary policy easing.
“Sarb remains concerned that (inflation) expectations have become too closely anchored around the upper end of the 3-6% target band,” Mminele said. –