SA will avoid recession this year due to recovery in mining and manufacturing sectors
According to Engineering News, South Africa will avoid a recession this year with a recovery in areas like mining and manufacturing likely to lift growth in the last three quarters, the central bank said on Wednesday. Growth contracted 1.2% in the first quarter as the mining, manufacturing and agricultural sectors retreated sharply.
South Africa should, however, narrowly avoid a recession despite the central bank last week cutting its growth forecast for 2016 to zero, Deputy Governor Daniel Mminele said in a speech posted on the bank‘s website. “The SARB does not believe that a contraction in the second quarter is likely,” Mminele said.
“In order to achieve a growth rate of zero%, the economy will need to grow by between 0.8 and 1.0% in each of the three remaining quarters. “On the effects of the UK’s decision last month to quit the European Union, Mminele said South Africa would be among the hardest hit economies in Africa. FDI inflows to South Africa are already on the decline, falling to 9.9 billion rand ($690 million) in the first quarter from 22.6 billion in the final quarter of 2015.