Goldman Sachs has revised its expectation of SA's GDP for 2018 downwards from 2% to 0.8%, citing the "downside surprise" in the GDP number for the second quarter. Most observers were expecting a modest improvement in GDP following a decline in the first quarter, but instead, the economy contracted by 0.7%, signaling that SA is technically in recession because of two consecutive quarters of negative growth. "The downside surprise mechanically lowers our 2018 growth forecast from 2% year-on-year to 0.8% year-on-year," Goldman said in a note on Tuesday afternoon. "On the expenditure side, domestic demand and, in particular, inventories exhibited significant weakness, while on the production side, agriculture contracted sharply (and to a lesser extent the tertiary sector). "This contraction follows a 2.6% decline in output in the first quarter, placing the economy in a technical recession and calling into question our expectation for a cyclical recovery to become more entrenched." The i...

BL Premium

This article is reserved for our subscribers.

A subscription helps you enjoy the best of our business content every day along with benefits such as articles from our international business news partners; ProfileData financial data; and digital access to the Sunday Times and Sunday Times Daily.

Already subscribed? Simply sign in below.



Questions or problems? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now