Hilary Joffe Columnist
Picture: ISTOCK
Picture: ISTOCK

Economists are revising down their forecasts for growth in 2018 after the economy contracted at a much worse than expected 2.2% in the first quarter, raising questions about how soon the confidence boost generated by SA’s new political leadership might translate into stronger investment and growth.

The rand weakened and bond yields rose in response to the shock first-quarter GDP data, the worst since the depths of the 2009 recession, and reflecting broad-based weakness in the economy.

"It is a bit of a wake-up call that, despite all the changes, it will take months if not years to change the structural issues in the economy," said Citadel chief economist Maarten Ackerman.

On a year-on-year basis, comparing 2018’s first quarter to 2017’s, the economy grew 0.8%, Statistics SA reported on Tuesday, but this was also still well below consensus expectations of 1.5%.

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