The Finance Ministry has acknowledged the fact that South Africa’s Gross Domestic Product (GDP) contracted 0.7% in the first quarter of 2017.

It has also acknowledged that this worse-than-expected GDP outcome introduces significant downward bias to the GDP growth estimates communicated in the 2017 Budget Review, which projected 2017 GDP growth at 1.3%.

The Ministry believes that despite the GDP contraction, there are green shoots that South Africa can leverage on to boost its own economic growth outlook. These include:

- improving global growth,

- stabilising commodity prices,

- more favourable climate conditions,

- reliable electricity supply, and

- less volatile labour relations

The Finance ministry has indicated that current growth rate, if sustained, will lead to a further decline in GDP per capita and revenue, risking the sustainability of South Africa’s fiscal framework and more importantly undermining the delivery of social services.

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The Ministry has indicated that the current state of the economy puts more pressure on government,business, labour and broader society to intensify it’s growth programme and improve confidence as a matter of urgency to arrest the decline and set the economy on a higher growth trajectory.

As part of this process the Minister of Finance Malusi Gigaba will be seeking a meeting with business leaders soon to discuss ways of working together to achieve inclusive economic growth.