South Africa expects the economy to grow at a rate of 0.5% in 2019 – which is a downward revision from the 1.5% that was projected in the February budget.
Finance Minister Tito Mboweni said this when he tabled the Medium Term Budget Policy Statement (MTBPS), also known as the mini-budget, at the National Assembly on Wednesday afternoon.
“It is our job to chart a course that is strategic, sober, careful and inclusive. The economy is now forecast to grow at 0.5 % in 2019 compared to the 1.5 % expected in February,” he said.
In addition, growth is projected to slowly rise to 1.7 % in 2022, supported by household consumption and private‐sector investment.
Mboweni’s projection comes after the country’s Gross Domestic Product (GDP) contracted by a revised 3.1% on a seasonally adjusted and annualised basis in the first quarter of the year.
As the energy constraint lifted, growth rebounded to 3.1 % in the second quarter.
“These two quarters cancelled each other out, and this year growth has been flat.There are some signs that investment spending is strengthening. In the second quarter, growth in gross fixed capital formation rebounded to 6.1 %,” he said.
Meanwhile, mining grew by 14.4% while credit growth in real terms has been positive since late 2018. Private sector credit extension rose 6.2% in September.
Mboweni also said that home loans grew by 5% year‐on‐year, the fastest rate seen in some time.
When the Minister presented the 2019 Budget in February, he walked into the National Assembly with an Aloe Ferox plant.
He said like the plant, the economy has since gone through a difficult winter where the ground became hard and the leaves fell from the trees.
This translated to poverty worsening and people losing their jobs. Government expenditure continues to exceed revenue while the national debt is increasing at an unsustainable pace.
“As any farmer will tell you, if you want a bumper harvest, you must be prepared to work hard during the end of winter and early spring. Because what you do to the soil then determines how successful your crop will be.”
“Now is the time. We cannot wait any longer. If we want a successful harvest, we must act today,” said Mboweni. – SAnews.gov.za