Economists optimistic SA is on recovery path
Growth was 0.3% for 2016, lower than the Treasury’s forecast of 0.5% and the Reserve Bank’s forecast of 0.4%, but economists insist on looking ahead
SA’s economy shrank in the fourth quarter, making 2016 the worst year since the 2009 recession, but economists are optimistic that the worst is behind us. Economic growth was 0.3% for 2016, lower than the Treasury’s forecast of 0.5% and the South African Reserve Bank’s forecast of 0.4%. According to Statistics SA, GDP contracted 0.3% quarter on quarter in the fourth quarter of 2016. SA avoided a recession only on technical grounds — there was a fall in output in the first quarter and fourth quarter, but not in any two consecutive quarters. Capital Economics economist John Ashbourne said: "While today’s figures make for gloomy reading, we believe that the underlying trend supports our view that growth will pick up in 2017. "The key forces that have dragged on growth eased at the end of the year [2016]. The worst is now behind us. We expect that growth will accelerate to 2% in 2017, which is significantly above consensus."While output in the agricultural sector contracted in the first...
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