mobile menu mobile search

Bleak outlook for SA in 2016 and 2017: report

Bleak outlook for SA in 2016 and 2017: report

A new economic report by FocusEconomics paints a bleak picture for the South African economy in 2016 and 2017.

The report, which forecasts the outlook for Sub-Saharan Africa in 2016 and 2017, expects South Africa to experience the slowest growth out of all the major economies in the region.

Real GDP growth is expected to be 1.6% (revised down from previous estimates of 1.7%) in 2016, optimistically increasing to 2.1% in 2017.

Following massive turbulence in the market in the opening weeks of 2016, economists and analyst have revised GDP growth expectations for the country even lower – as low as 0.5% in some cases.

“The county’s outlook is dim. The electricity and water supply constraint will hamper growth by both interrupting production and by discouraging investment,” the group said.

“Moreover, a moderation in Chinese demand and low commodity prices will weigh on growth.”

Further, the group warns that consumer inflation is likely to remain high in 2016, averaging 5.9% for the year, before easing to 5.7% in 2017.

The South African Reserve Bank expects inflation to average 6.0% in 2016 and 5.8% in 2017, the report said.

Inflation inched up from 4.7% in October 2015 to 4.8% in November, hitting a four-month high and putting pressure on the Central Bank to act.

Against that backdrop of a depreciating currency and rising inflationary risks, the South African Reserve Bank hiked the repo rate to 6.25% in November.

Economists have said that it is likely the Bank will again hike rates at the end of January 2016, pushing the repo rate up by 50 basis points or more.

The FocusEconomics panel believes the repo rate will hit 6.85% in 2016, and may even rise to 7.05% by 2017.

More on the SA economy

How to fix South Africa’s economy: fire Zuma

What South Africans think about the economy

South Africa’s economy could sink to number three in Africa

BusinessTech's Staff Writer is directly plugged into the South African Internet backbone, and spits out press releases and other news as they receive it. They are believed to be cl...
Join the Conversation
  • victor lossa

    …Over to you Mr Gordhan…..

  • HairyBear

    Not according to President Zuma. It’s all a gross exaggeration, a fiendish plot by over-privileged Whites. Africans are on track to revolutionary glory. South Africa will soon fit into that fabulous jigsaw puzzle – the Failed African Continent.

    • LBS

      The continent that is so big that all the others will fit into this one, or something like that….

  • mlub

    If we can get rid of Zuma, and replace him with someone of sound intellect,we might change things around.

    • Greg_Shark

      you’re an optimist…. I believe we need a change of government to like minded ‘normal’ people irrespective of their pre political affiliation

      • mlub

        So you don’t think that there are any individuals in SA who soundly intellectual? Zuma is a ‘normal’ person. He only lacks sound intellectual capability to run a country.

        • LBS

          I prefer Mmusi Maimane, therefore I prefer DA.

  • Mark Turing

    The ANC hasn’t got the leadership anymore to lead the country forward, we going down economically, mass unemployment it’s not a pretty time.

  • JoeCitizen3

    Eish…. must be another Zuma (Which zuma????) must fall …… with this weak rand…eish! TIA ……

Join our newest FREE BusinessTech newsletter today!