South Africa unlikely to grow by more than 1% in 2018


Our initial optimism that the second quarter GDP growth would be positive waned as the year progressed with no significant improvement in higher frequency economic data being evident.

The contraction in the second quarter GDP growth is therefore not entirely surprising to us and reflects the tough environment which many South African listed companies have alluded to in recent results.

Not only has GDP growth contracted (-0.7%) for a second consecutive quarter this year, but the unexpectedly weak first quarter number was also revised lower (to -2.6%).

Agriculture is clearly battling and was the largest detractor from growth this quarter. The second quarter GDP was a tough number with little indication of increased investment or spending and now puts South Africa into a technical recession.

Land reform has undoubtedly put a damper on business confidence, while increased consumer spending is not yet coming through despite the uptick in consumer sentiment seen in other surveys.

It looks unlikely that SA will grow by more than 1% this year, and the Medium-Term Budget in October will once again face tough choices.

Reza Hendrickse CFA, PPS Investments Portfolio Manager


About Author

Thabo Mphahlele is the BizNis Africa Head of Sales and Marketing. Mphahlele was previously MultiChoice Production Support Analyst responsible for developing and monitoring applications. In addition, Mphahlele develops and automates batch scripts and is responsible for the daily infrastructure maintenance at MultiChoice. As a Production Support Analyst, he is responsible for incident analysis solving , developing and constructing business reports for SQL and Oracle and implement change controls for the business. Additional responsibility includes monitoring system performance via SOA, Kibaba (Elasticsearch), H.P BSM, HP Sitescope. Mphahlele is responsible for creating infrastructure performance reports through HP Ops Analytics, monitoring payments via Splunk and in-house built-in tool and disaster recovery simulation and testing. At Nashua Mobile, he was responsible for application development and enhancing the web sites At South West Gauteng College, he was the IT Technician and Network Administrator. During his tenure at Double Digit Media, he was he focused on application and web site development for new and existing clients Mphahlele contributes as a Content Manager for BizNis Africa.

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