The IMF forecast for 2016 was revised downwards by 0.8 percentage point to 1.3 per cent. South Africa’s second quarter economic performance reflected a contraction in growth, with the weakest performances recorded in the primary and secondary sectors of the economy, although the tertiary sector also witnessed a slight moderation.
Consumer demand is weak and the outlook is one of a constrained consumer given a backdrop of slow employment growth, declining disposable income growth and rising inflation. Confidence indicators for business have also deteriorated. Growth will remain constrained by global developments as well as low confidence levels and domestic bottlenecks such as limited electricity supply.