2017: THE Year desperate for Economic Growth

A volatile currency that remains weak historically; GDP growth of less than 1%; a notoriously high unemployment rate; widening inequality and the industrial failings of a commodity-driven growth model. Not a pretty picture of an economy. Yet this is what South Africa is faced with.

Speaking at the release of the World Bank’s ninth South African Economic Update on 17 January in Johannesburg, World Bank senior economist Marek Hanusch said that SA’s GDP per capita growth has been negative for the last three years, which translates into less income for the poor and fewer resources for government to meet its development objectives.

The National Development Plan (NDP) set out to create 600 000 new jobs every year, to bring down the unemployment rate to 6% in 2030. Needless to say, we have been falling significantly short.

The update reveals that in the third quarter of 2016, the unemployment rate edged up by 1.6 percentage points compared with the same period in 2015, touching 27.1%, the highest recorded level in 13 years.

Latest figures from StatsSA also reveals an increased inflation rate, which rose to 6.8% year-on-year in the recent quarter, which will put the South African Reserve Bank in their first MPC meeting under pressure to consider interest hikes.

The ninth South African Economic Update estimates growth in 2016 to have been 0.4%, making it the third year of declining GDP growth. GDP is expected to accelerate to 1.1% and 1.8% in 2017 and 2018, respectively, according to the report.

All-in-All, 2017 will see South Africa in desperate need for Growth!

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