Worst GDP in a century may mean still lower repo rate
Data will probably show that the economy contracted 49% in the second quarter
A dismal GDP reading showing SA on track for its worst economic performance in about a century could seal the case for another interest-rate cut by the Reserve Bank before the year is out.
Statistics SA data on Tuesday will probably show that the economy contracted 49% in the second quarter, covering the period at which SA’s lockdown was at its most severe, according to a Bloomberg survey of 13 economists. That reading, and the implications of demand in the economy remaining depressed, may give policymakers the room to cut the main interest rate, which is already at the lowest level in about half a century, by another 25 basis points as early as the September meeting, economists said.