FNB cuts its growth forecast to ‘just 0.7%’
Economists have warned SA’s green shoots of economic growth might be at risk after two downgrades
FNB is the first South African bank to revise down its economic growth forecast for 2017, predicting that it will deteriorate to 0.7%. The IMF last week forecast SA’s growth at 0.8%. The Treasury forecasts growth for 2017 at 1.3%, while the Reserve Bank places it at 1.2%. After the recent knock of two credit rating downgrades in one week, economists have warned that SA’s green shoots of economic growth might be at risk, but many also said it was a "wait-and-see game". "Overall, SA’s economy is still expected to grow ahead of last year’s 0.3% GDP in 2017, but recent political noise and the subsequent credit ratings downgrade has forced us to downwardly revise our expectations of 1.1% this year, to just 0.7%," FNB economist Mamello Matikinca said. Last week, in its World Economic Outlook report, the IMF warned that SA needed to institute urgent reforms to its product and labour markets to allow the entry of new companies and stimulate job creation. Without such reforms, confidence wou...
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