Economic overview: 19 September 2017

Our GDP forecast remains unchanged at 0.4%, despite a rebound, as political uncertainty continues

We have not changed our GDP forecast of 0.4% for 2017, despite the rebound in growth in the second quarter, since we believe the improvement is likely to be short-lived. The agriculture sector has been the main driver behind the growth rebound, but the persistent drought in the Western Cape – which contributes over 20% to South Africa’s agricultural economy – poses a significant threat. On the expenditure-side, the expansion primarily reflected an increase in consumer spending, supported by a decline in inflation.