SPENDING in the local economy contracted in the second quarter of 2016 amid a decline in fixed investment spending and a de-accumulation in real inventory holdings, the Reserve Bank’s quarterly bulletin showed on Tuesday.This means spending by households, government, and private and state-owned enterprises was not enough to support economic growth in the second quarter.Lower spending is one of the reasons economic growth is expected to be close to zero in 2016.Real gross domestic expenditure continued to contract, shrinking 3.3% in the second quarter after declining by 2.2% in the first quarter.Spending by households increased after contracting in the first quarter, while growth in general government spending accelerated.Investment spending by private business enterprises declined but at a slower pace in the second quarter. The declines were mainly due to low business confidence levels, excess capacity and subdued demand, the Bank said.Fixed investment spending by government and its...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.