Recession looming, unless we m

Recession looming, unless we manage 1% growth per quarter for the rest of 2016

If South Africa is to stave off recession, the country’s economy will have to grow by at least 1% in the three remaining quarters of the year.

Recession looming, unless we m

Fin24 reports that SA’s economic growth contracted by 1.2% in the first quarter of 2016, but deputy Reserve Bank governor Daniel Mminele believes there is still hope of us avoiding a recession. He did, however, add that any potential economic recovery would be weak.

“The SARB does not believe that a contraction in the second quarter is likely,” Mminele said.

“In order to achieve a growth rate of 0%, the economy will need to grow by between 0.8% and 1.0% in each of the three remaining quarters.”

He added that there are positive signs to look out for in the second quarter. These include the mining and manufacturing sector, a fall in inflation and continuously low oil prices.

SA’s manufacturing output spiked in May while the decline in the mining sector slowed.

“It remains to be seen if some of the favourable factors that contributed to the decision to keep interest rates unchanged will be sustained,” Mminele said.