Economic outlook for the year ahead: growth likely to be subdued compared to first quarter
Any hope of sustaining or accelerating the economic recovery in the latter half of the year were dealt a blow after a week of civil unrest, property damage and looting in KwaZulu-Natal and Gauteng. These events will undoubtedly set the recovery back, with early estimates indicating up to 1% being shaved off GDP growth.
The charred remains of a truck in KwaZulu-Natal where unrest and violent protests left a trail of destruction. Photo: Reuters The recent strength of the rand – which was a benefit for exporters – should not be mistaken for a sign of the strength of the economy. A positive consequence of the economic growth in the first half of the year was that it allowed the National Treasury to reduce the shortfall on the main budget. And to its credit, the Treasury used the opportunity to reduce debt issuance.
From a budgetary perspective, another challenge is the cost of social welfare given high – and increasing – unemployment. In response to the fiscal cliff crisis that we face a significant focus of government has been expense containment. This may be a short-term solution to the problem if successful. However, the real challenge that South Africa needs to address is its longer-term trend of sub potential economic growth.
South Africa Latest News, South Africa Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Ramaphosa’s R350 grant not enough – economic justice group | CitypressThe relief measures recently announced by President Cyril Ramaphosa will not be enough, says the Pietermaritzburg Economic Justice & Dignity Group.
Read more »
Nokia boosts 2021 outlook after strong second quarterThe Finnish telecoms giant announced a net profit of 344 million euros for April-June ($408), up from 94 million one year previously.
Read more »
Credit extension falls for fourth month in June amid business cautionLoans and advances fell 0.5% year on year in June, with corporate activity still subdued, even as demand from households remains robust
Read more »
Nissan raises full-year outlook after surprise quarterly profitCEO Makoto Uchida expects chip shortage situation will improve but warns there are still ‘many complexities’
Read more »
Beer giant AB InBev sees profit doubleAB InBev, the world's biggest brewer, said that year-on-year net profits had doubled in the second quarter as sales soared past their pre-pandemic levels.
Read more »
Sanofi raises profit outlook after strong second quarterFrench drugmaker posts nearly €9bn in revenue for the quarter
Read more »