SA’s economy still plagued by policy uncertainty
Clarity around the issue of land reform and the medium-term budget policy statement on October 24 remain crucial
Policy uncertainty has continued to linger in SA and has been worsened by the recession, an index published by North West University (NWU) shows.
On Wednesday, the NWU school of business and governance's policy uncertainty index moved further into negative territory for the third quarter, rising to 52.2 compared to 51 in the second quarter.
A figure above 50 reflects heightened policy uncertainty, while a score below that indicates reduced uncertainty.
In a statement, NWU economist Raymond Parsons said: “The emergence of a ‘technical recession’ in SA in the first half of 2018 in particular increased the level of economic uncertainty. In the past few months there was also a heavy spell of risk aversion from emerging markets, triggered mainly by the economic troubles in Turkey.”
While Parsons expects economic activity to improve in the second half of 2018, the economy will continue to grapple with policy and political uncertainty, despite a broadly supportive global economic growth backdrop.
Clarity around the issue of land reform and the medium-term budget policy statement on October 24 remain crucial, he said.
“Although SA’s general election in the first half of 2019 will inevitably also generate political and policy uncertainty, interim steps to boost investor confidence and growth must continue to seek to create a more favourable economic environment,” said Parsons.