CAPE TOWN: The South African economy is forecast to grow by 1% during 2017 from an estimate real GDP growth rate of 0.5% in the preceding year, says KPMG senior economist, Christie Viljoen. This is in line with a Reuters poll of 27 economists taken over the past week which suggested growth would increase to 1.1% this year and 1.6% in 2018.
All 27 economists expect the repo rate to remain at 7% when the Monetary Policy Committee (MPC) of the South African Reserve Bank (SARB) meets next week for the first time in 2017. And according to Reuters, medians for the rest of the year suggest no change for the repo rate after next week’s policy announcement. “The bank may still have a change of heart in its rate stance come the second half of this year, opening up room for it to cut policy rates later in the year,” said BNP Paribas economist Jeffrey Schultz.
Speaking at the annual Nedbank Vinpro Information Day on Thursday, Nedbank economist Nicky Weimar said: “The interest rate hiking cycle might have peaked and interest rates could start going down in the second half of 2017 and into 2018.” “We believe the economy is getting slightly better and it could be the beginning of recovery. It depends, however, to some degree on good political behaviour. Maybe the SA economy could grow by about 1.4% if all goes well in 2017,” the economist said, as reported by News24. In its report The South African Economy in 2017: Upside Factors and Downside Risks KPMG’s listed some of the risk factors that will influence the South African economy during 2017.
