The next two weeks of “coalition” talks will be the biggest determinant of South Africa’s economic direction over the next few years.<\/p>\n\n\n\n
\u201cWe need a government that can fast-track policy and provide policy certainty, but we are unlikely to see this in the year ahead,” said Citadel\u00a0Chief Economist Maarten Ackerman.<\/p>\n\n\n\n
“We may see slower than usual formulation and implementation of policies, especially economic policies, as the new government of national unity (GNU) finds its feet over the next year.”<\/p>\n\n\n\n
“We\u2019re unlikely to see any real policy support for the economy in the next year, given that the focus will be on political issues.” <\/p>\n\n\n\n
Ackerman added that it remains to be seen if economic policy will change after the GNU talks are completed.<\/p>\n\n\n\n
\u201cIf the GNU is pro-populist we may see a change in policy.” <\/p>\n\n\n\n
“If it tilts towards pro-business or if it is business-as-usual and we can get private sector participation to address some of the important structural issues in the economy, we can get the economy back to capacity growth.”<\/p>\n\n\n\n
“However, that is a big \u2018if\u2019.\u201d<\/p>\n\n\n\n
South Africa’s GDP decreased by 0.1% in the first quarter of 2024, and he added that the country will only escape its ‘per capita recession’\u2014where population growth exceeds economic growth\u2014if it achieves 1.5% GDP growth over a sustained period.<\/p>\n\n\n\n