5 September 2017

South Africa: Minister Gigaba Cautiously Welcomes Improved GDP Figures

Photo: Nick Roux/Wikimedia
(file photo).

Finance Minister Malusi Gigaba has cautiously welcomed news that the South African economy has exited a technical recession, saying the country is still facing major challenges.

"We need to remain honest about the major challenges that still face the local economy. Poverty, unemployment and inequality, which are being underpinned by persistent low growth, remain a challenge. Government and the private sector are to work closer together to inclusively develop the South African economy. I will be working closely with anyone who shares the urgency for higher economic growth," he said on Tuesday.

The Minister said any improvement in economic growth is encouraging.

Statistics South Africa (Stats SA) held a media briefing in Tshwane on Tuesday to release Gross Domestic Product (GDP) figures for the second quarter of 2017, which show that the economy has exited a technical recession.

In the second quarter, GDP rose by 2.5%, beating economists' expectations of a 2.3% growth, following a contraction of 0.7% in the first quarter of 2017. The contraction in the first quarter was preceded by a 0.3% contraction in the fourth quarter of 2016.

"National Treasury would like to welcome the second quarter data, which showed a rebound in economic growth to 2.5% (seasonally adjusted annual rate)," Treasury said.

Notable growth rates were recorded in agriculture, mining, finance and manufacturing.

"Although it is still early to suggest a longer term trend reversal, the data provides a platform that we can all build on for a more shareable growth path. Efforts to bolster confidence, as packaged in the 14-point Action Plan action items, together with continuing work through the economic cluster, should combine to set the country on a higher growth trajectory," said Treasury.

The plan, released by Minister Gigaba in July, includes several interventions and timelines, and is set to inspire confidence in the country.

Treasury has called on all stakeholders -- labour, business, community and government -- to continue to work in the interest of a more robust and inclusive economy.

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