SA’s economic prospects ‘improved’ since GNU formation
Standard Bank economist at Dr Elna Moolman says the country’s economic prospects have improved since the establishment of the government of national unity.
The latest data from Statistics South Africa show that the economy grew by 0.4% between April and June.
The growth came mostly from finance, manufacturing, trade, electricity, gas and water supply.
"The 0.4% expansion in GDP in the second quarter of this year exactly matched our forecast,” says Moolman.
“Of course, this follows a reasonably broad-based contraction in the first quarter of the year, and this expansion was supported by the absence of load shedding.
“Since then, we've had significant political developments with the formation of the government of national unity towards the end of the quarter and the appointment of the new cabinet at the end of the quarter.
"Since then, the economic prospects have generally improved and we still expect to see in due course an expansion and recovery in fixed investment and an improvement in trend growth.”
Meanwhile, the Free Market Foundation has called on the government to act with greater urgency to address what it has described as countless constraints on economic growth.
Free Market Foundation CEO David Ansara said the investor confidence boost would be short-lived if the GNU cannot act swiftly to address the structural hindrances to growth.
“Establishing a unity government after three decades of single-party dominance is certainly a laudable accomplishment, but the time for sentimentality has now passed,
The FMF warns that unless parties to the GNU begin to rapidly reform the policy environment, they run the risk of squandering the goodwill that has been shown towards the new government.
“We are rapidly approaching the end of the first 100 days of the GNU. The honeymoon period is almost over. So far, we have witnessed precious little by way of concrete reform in any department.”
“In fact, what we have seen is the deeply worrying reversion to failed and harmful policies such as National Health Insurance, preferential procurement, and restrictive industrial policy, amongst others,” he added.
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