South African Reserve Bank governor, Lesetja Kganyago, says that while a decision by Britain to exit the European Union will impact economic growth locally, it will not lead to a recession.<\/p>\n
Speaking to Bloomberg TV in Portugal, Kganyago said: “We would not venture into a recession at this stage, but there is no doubt that it will slow the South African economy from the weak growth that we already have.”<\/p>\n
Bloomberg<\/a> reported that South Africa’s economy shrunk by 1.2% in the first quarter, while gross domestic product is expected to grow by as little as 0.8% in 2016, according to the central bank – the slowest pace since a 2009 recession.<\/p>\n Britain voted last week in a referendum to leave the EU, wiping billions of dollars off world equity markets, with local markets also left reeling until a mild recovery on Tuesday.<\/p>\n “It has affected sentiment and investors were looking for safe assets. We are not seen as one of the safe assets,” Kganyago said.<\/p>\n The Reserve Bank governor said that Brexit is unlikely to affect the central bank\u2019s interest-rate outlook, expected next month – on 21 July.<\/p>\n “There are so many moving parts at the moment,” he said. “In looking at the effect of the global economy on South Africa we look beyond the UK.”<\/p>\n On Wednesday morning, the rand tested a move below R15 (15.02) against the dollar, 1% firmer than the previous session.<\/p>\n The local unit was also stronger against a battered pound, at R20.09, and was trading at R16.68 against the euro.<\/p>\n Here\u2019s what the Brexit did to South Africa\u2019s richest people<\/strong><\/a><\/p>\nMore on Brexit<\/h3>\n