NEWS

SA Economic Growth At The Lowest Since 2009

But some reports suggest it is not all doom and gloom.

08/03/2017 07:36 SAST | Updated 08/03/2017 07:38 SAST
Siphiwe Sibeko / Reuters

South Africa's economy all but ground to a halt in 2016, the latest statistics show, but some reports say the worst could be over. Last year was the worst year for the economy since the 2009 recession, with the economy shrinking in the fourth quarter of 2016, Business Day reported on Wednesday.

In 2016, economic growth was lower than Treasury and the Reserve Bank's forecasts, at 0,5% and 0,4% respectively, at just 0,3%.

The paper reported that South Africa narrowly avoided a recession but only on "technical grounds", as a fall in output was recorded in the first and fourth quarters, but not in two consecutive quarters.

But economists told Business Day that the worst was over.

Econometrix director Azar Jammine told the paper that this was the "bottom of the economic cycle" and that an improvement should be seen soon.

BNP Paribas economist Jeffrey Schultz was quoted as saying there were several factors which indicated that relief could be in sight. This includes improved terms of trade, lower inflation in the second half of 2016, and a lower current account deficit.

Agriculture also recovered slightly as the drought lifted in the second half of the year.

According to eNCA, the production in the mining industry dropped 11,5% in 2016 was the main contributor to the overall economic picture. Manufacturing also slowed down.