{"id":312258,"date":"2019-04-18T08:03:46","date_gmt":"2019-04-18T06:03:46","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=312258"},"modified":"2019-04-18T08:03:46","modified_gmt":"2019-04-18T06:03:46","slug":"damage-done-to-south-africa-by-state-capture-worse-than-previously-thought","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/312258\/damage-done-to-south-africa-by-state-capture-worse-than-previously-thought\/","title":{"rendered":"Damage done to South Africa by state capture worse than previously thought"},"content":{"rendered":"

It is becoming clearer that the damage done by \u2018state capture\u2019 is worse than previously understood.<\/p>\n

This is according to the South African Reserve Bank’s Monetary Policy Review<\/a><\/strong> for April 2019 which found that capital expenditure, especially by state-owned enterprises, has been less productive than anticipated.<\/p>\n

“To take one highly visible example, the economy has less electricity than it had a decade ago, despite massive Eskom investments in new generating capacity,” the SARB said.<\/p>\n

“Repairing the state and parastatals is also proving expensive, requiring higher administered prices and taxes. These adverse conditions seem to be blocking a stronger rebound in growth. Indeed, there are risks that electricity shortages could cause even lower growth rates than currently projected.”<\/p>\n

South Africa\u2019s potential growth rate is at long-term lows estimated at only 1.3% this year, and rising to 1.5% by 2021.<\/p>\n

“Despite this low potential, recent shortfalls in actual growth outcomes \u2013 for 2016 and 2018 in particular \u2013 mean the output gap is still negative at an estimated -1.1% of potential GDP.<\/p>\n

“The forecasts indicate output will only realign with the economy\u2019s supply capacity in 2021,” the SARB said.<\/p>\n

W-shaped recovery\u00a0<\/strong><\/p>\n

\"\"<\/a><\/p>\n

The South African Reserve Bank\u2019s (SARB) growth forecasts had previously indicated a V-shaped recovery, with a trough in 2016 and a rebound thereafter.<\/p>\n

“Growth was slightly better than expected in 2017, at 1.4%, with most of the positive news in the second half of the year,” the SARB said.<\/p>\n

“The forecast narrative held that this momentum would be sustained by better business and consumer confidence. Instead, the economy slumped in the first half of 2018, recording a technical recession.<\/p>\n

The SARB\u2019s projections now indicate a W-shaped recovery, with dips in both 2016 and 2018. The pace of the recovery has also been marked down, it said.<\/p>\n

\n

Read: The world\u2019s most miserable economies includes South Africa<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

It is becoming clearer that the damage done by \u2018state capture\u2019 is worse than previously understood.<\/p>\n","protected":false},"author":10,"featured_media":75316,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[26],"class_list":["post-312258","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-headline"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/312258","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=312258"}],"version-history":[{"count":5,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/312258\/revisions"}],"predecessor-version":[{"id":312294,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/312258\/revisions\/312294"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/75316"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=312258"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=312258"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=312258"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}