On 6 June National Treasury released a media statement in response to the South African economy entering a recession. It follows the announcement that South Africa’s gross domestic product (GDP) contracted 0.7% in the first quarter of 2017, which is particularly concerning in comparison to the 1.3% estimated in the 2017 Budget Review.
According to National Treasury, despite the contraction, there are green shoots that South Africa can leverage to boost its own economic growth outlook. These include: (i) improving global growth, (ii) stabilising commodity prices, (iii) more favourable climate conditions, (iv) reliable electricity supply, and (v) less volatile labour relations. [The concern is that the majority of these fall outside of South Africa’s control.]
The media release concludes that the Finance Minister will be seeking a meeting with business leaders soon to discuss ways of working together to achieve inclusive economic growth.
