SA’s Q2 GDP growth rate un­sus­tain­able

The Citizen (KZN) - - BUSINESS -

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. –

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