Standard Bank slashes SA economic growth outlook for 2022
Business and consumer confidence set to remain weak, while the July unrest adds to fears about political stability
10 February 2022 - 19:11
byAndries Mahlangu
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Standard Bank expects SA’s economy to grow 2% in 2022, slowing from its projected level of 4.9% in 2021 and underscoring the crucial need for structural reforms to unlock the country’s growth potential.
With the ruling ANC due to hold its elective conference in December, Standard Bank chief economist Goolam Ballim said on Thursday the reorganisation of the party’s top six officials is critical for President Cyril Ramaphosa to foster long-lasting reforms.
Ramaphosa’s “likely re-election should to some extent anchor the political outlook as well as contain volatility within the party. It may be that the discussion will centre more on who joins President Ramaphosa in the ANC’s top six.
“Here the focus we expect to reset primarily on the positions of the deputy president and secretary-general.”
The ANC’s factional battles have played out openly between those aligned to Ramaphosa, who has committed to reform the party and tackle corruption, and those aligned to former president Jacob Zuma.
Ballim said Ramaphosa’s success in 2022 and throughout his likely second term will to a large extent rest on his ability to unshackle himself from the decline in the ANC’s support and aggressively push the reform agenda with his allies.
Standard Bank joins Absa, which last week said it expects GDP to expand 2.1% in 2022, down from an estimate of 4.7% in 2021.
Crippled in part by low business confidence and chronic power shortages, the SA economy has hardly grown over the past decade, a period marred by widespread misappropriation of state resources under former president Zuma.
Ballim said business and consumer confidence will remain weak, with the civil unrest in July adding to long-term concern about political stability. Intermittent power cuts, which he said have reduced growth by one percentage point on average since 2019, will also feature in 2022.
Consumer inflation is likely to average 5.2% in 2022, according to Standard Bank, while it expects the Reserve Bank to hike rates at least three times this year.
Absa has said inflation has probably peaked in December, when it reached an annual 5.9%, a five-year high, and is likely to average 4.8% in 2022.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Standard Bank slashes SA economic growth outlook for 2022
Business and consumer confidence set to remain weak, while the July unrest adds to fears about political stability
Standard Bank expects SA’s economy to grow 2% in 2022, slowing from its projected level of 4.9% in 2021 and underscoring the crucial need for structural reforms to unlock the country’s growth potential.
With the ruling ANC due to hold its elective conference in December, Standard Bank chief economist Goolam Ballim said on Thursday the reorganisation of the party’s top six officials is critical for President Cyril Ramaphosa to foster long-lasting reforms.
Ramaphosa’s “likely re-election should to some extent anchor the political outlook as well as contain volatility within the party. It may be that the discussion will centre more on who joins President Ramaphosa in the ANC’s top six.
“Here the focus we expect to reset primarily on the positions of the deputy president and secretary-general.”
The ANC’s factional battles have played out openly between those aligned to Ramaphosa, who has committed to reform the party and tackle corruption, and those aligned to former president Jacob Zuma.
Ballim said Ramaphosa’s success in 2022 and throughout his likely second term will to a large extent rest on his ability to unshackle himself from the decline in the ANC’s support and aggressively push the reform agenda with his allies.
Standard Bank joins Absa, which last week said it expects GDP to expand 2.1% in 2022, down from an estimate of 4.7% in 2021.
Crippled in part by low business confidence and chronic power shortages, the SA economy has hardly grown over the past decade, a period marred by widespread misappropriation of state resources under former president Zuma.
Ballim said business and consumer confidence will remain weak, with the civil unrest in July adding to long-term concern about political stability. Intermittent power cuts, which he said have reduced growth by one percentage point on average since 2019, will also feature in 2022.
Consumer inflation is likely to average 5.2% in 2022, according to Standard Bank, while it expects the Reserve Bank to hike rates at least three times this year.
Absa has said inflation has probably peaked in December, when it reached an annual 5.9%, a five-year high, and is likely to average 4.8% in 2022.
mahlangua@businesslive.co.za
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