Tito Mboweni

JOHANNESBURG - Finance Minister Tito Mboweni cut the forecast for growth in the South African economy by 1% and said the expected growth was 0.5% instead of 1.5%.

Mboweni was delivering his Medium Term Budget Policy Statement in Parliament on Wednesday. 

Mboweni said in his speech: "In the first quarter of this year, the South African economy contracted by a revised 3.1 per cent on a seasonally adjusted and annualised basis. As the energy constraint lifted, growth rebounded to 3.1 per cent 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."

Mboweni stated that in the second quarter, growth in gross fixed capital formation rebounded to 6.1 per cent. Mining grew by 14.4 per cent. In real terms, credit growth has been positive since late 2018. 

Private sector credit extension rose 6.2 per cent in September. Home loans grew 5 percent year‐on‐year, the fastest rate in some time. But corporate credit extension has softened. 

The finance minister cut the forecast for growth by 1%, saying that although it was expected that the economy would grow by 1.5%, government is now expecting the economy to grow by just 0.5%. 

"In September, headline consumer price inflation was 4.1 per cent. Lower inflation is good for everyone, particularly for the poor and the working class.   In short, it is a mixed picture with some positive signs.   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 per cent in 2019 compared to the 1.5 per cent expected in February. Growth is projected to slowly rise to 1.7 per cent in 2022, supported by household consumption and private‐sector investment," Mboweni said. 

On the continent as a whole, Mboweni said, "The African continent has a young, growing, entrepreneurial population. Sub‐Saharan Africa is expected to grow by 3.6 per cent next year, the second‐fastest growing region after Asia excluding Japan."

"In Ghana, after extremely difficult structural reforms, growth is expected to be 7.5 per cent this year and 5.6 per cent next year. Ethiopia will grow by over 7 per cent. They clearly have new shoes. Why don’t we?"

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