AFTER slow economic growth in recent months and the downgrading of the economy by international ratings agencies, South Africa’s economic growth rate could recover by between 1.7% and 1.9% this year.
This according to Chief Executive of the Institute of Race Relations (IRR), Frans Cronje, in light of former President Jacob Zuma’s resignation.
‘If a compelling case can be made for growth and fiscal prudence in the budget speech, the odds of a further rating downgrade fall to below 50%,’ he said.
Cronje is also of the view that the ANC should ‘comfortably attain a majority of above 60% in the next election’.
‘However, maintaining such a majority will be determined in the main in the economy.
‘The government must aspire to growth rates of above 5% of GDP over its next term to have any hope of significantly eroding the unemployment rate.’
Despite analysts’ forecasts of quarter-on-quarter growth of 1.5% for 2017, the economy grew in last year’s third quarter by 2%.
This followed an increase of 2.8% in the second quarter of 2017.
According to StatsSA, agriculture, mining and manufacturing were the main drivers of the expansion, while there was a contraction in general government services resulting from low employment numbers in the public sector.
Agriculture was responsible for last year’s healthier-than-expected economic growth, posting a 44% expansion in the third quarter.
This followed an expansion of 38% in the second quarter.
The IRR produces, disseminates, and promotes the new ideas that South African policymakers need to promote the investment and economic growth that will draw poor people into jobs and build a more prosperous South Africa.
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