ECONOMIC RECOVERY
The minefield of forecasting SA’s GDP growth
Until there is hard evidence of rising productivity, efficiency and investment, SA’s economic growth potential will remain weak, says the Reserve Bank
At a time when the economy is poised for lift-off and nearly all economists expect confidence and investment to gain momentum, the Reserve Bank is almost alone in forecasting slower growth next year than in 2018. The Bank’s most recent forecast, released at its March monetary policy committee (MPC) meeting, is that real GDP growth will revive to 1.7% this year, but drop to 1.5% next year. National treasury is hoping for growth of 1.5% rising to 1.8% over the same period. The Reuters consensus is that growth will be 1.6% in 2018 and 1.9% in 2019, while S&P Global Ratings is even more bullish, forecasting growth of 2% this year and 2.1% in 2019, compared with just 1% and 1.7% previously. "I am very aware of the fact that we’re a bit of an outlier," says MPC member Rashad Cassim, who is also the Bank’s head of research. He thinks the Bank’s new quarterly projection model (QPM) explains the difference between its growth forecast and the consensus view. "This model takes into account mor...
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