South Africa\u2019s growth outlook has been revised downwards to 0.7% in 2018, said National Treasury on Wednesday.<\/p>\n
\u201cThe National Treasury forecasts that GDP growth will slow to 0.7% in 2018, down from 1.3% last year, before rising to 1.7% in 2019 and 2.1% in 2020,\u201d said Treasury as Finance Minister Tito Mboweni tabled his maiden Medium Term Budget Policy Statement (MTBPS) in Parliament.<\/p>\n
Treasury said that the country\u2019s economic outlook is weaker than projected in the February 2018 Budget, which forecast 1.5% and 1.8% Gross Domestic Product (GDP) growth in 2018 and 2019, respectively.<\/p>\n
\u201cThese revisions reflect lower production by agriculture and mining in the first half of the year, as well as a lack of new investment,\u201d said the MTBPS statement while also adding that agriculture and mining are expected to return to moderate growth in the next year.<\/p>\n
Meanwhile, business and consumer confidence are expected to improve gradually over the medium term.<\/p>\n
On inflation, the MTBPS document stated that higher inflation is expected during the remainder of 2018 in response to administered price increases.<\/p>\n
\u201cHeadline inflation is projected to average 4.9% in 2018, rising to 5.4% by 2021 as food price inflation returns to its historic average,\u201d it said.<\/p>\n
On investment, Treasury said the country has experienced an extended period of weak investment.<\/p>\n
\u201cGrowth in gross fixed-capital formation, after slowing to 0.1% in the first half of 2018, is expected to measure 0.9% for the year as a whole, and 2.9% by 2021.<\/p>\n
\u201cLow levels of demand and prolonged policy uncertainty have contributed to anaemic investment growth,\u201d said Treasury.<\/p>\n
In recent months, government has worked actively to improve the investment climate by strengthening governance in state institutions and removing policy bottlenecks in energy and mining.<\/p>\n
This comes on the back of President Cyril Ramaphosa\u2019s announcement of South Africa seeking to bring in at least R1.2 trillion worth of investment over a five year period.<\/p>\n