Goldman Sachs revises SA growth for 2018 downwards following 'downside surprise' in GDP
'The downside surprise mechanically lowers our 2018 growth forecast from 2% year-on-year to 0.8% year-on-year'
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...
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