FALLING CONFIDENCE
GAVIN KEETON: Why there’s no quick fix getting SA’s growth back on track
Astonishingly, our woes are mostly self-inflicted: SA’s growth collapse is a direct result of low levels of business and consumer confidence
The economy contracted over the past two quarters, resulting in SA’s second economic recession since 1994. There is little hope of swift recovery. Last week Finance Minister Malusi Gigaba acknowledged this when he announced that even the Treasury’s meagre 1.3% growth forecast for 2017 is now unlikely to be realised. For a second consecutive year, the economy will grow more slowly than our population. Slow growth, Gigaba says will "compromise our ability to rapidly reduce poverty, unemployment and inequality". Astonishingly, our woes are mostly self-inflicted. In a recent presentation, Stanlib economist Kevin Lings demonstrated how SA’s growth since 1994 has usually been closely tied to growth in the world economy. Sometimes we grew a bit faster than world growth, sometimes a bit slower. But the now four-year collapse of our growth has occurred while the world economy grew steadily. This divergence is unprecedented.Lings attributes SA’s growth collapse to low levels of business and c...
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