Demand for our main exports is growing slowly and trading conditions for most firms remain difficult. In addition to global factors, South Africa’s economic growth is also being adversely affected by a number of domestic factors including electricity supply constraints, strike action in key export sectors and infrastructure bottlenecks.
Increased savings partly reflect the desire of households to reduce their debt but are also prompted by high levels of uncertainty about the future. The latter, in turn, reflect the extent of the deterioration in the labour market, as well as concern about the precise impact of the planned fiscal adjustment on household finances.