Reserve Bank paints bleak picture of SA economy

2014-09-09 14:27

The Reserve Bank’s quarterly review, which pulls together all of the economic trends of the past quarter, is not a good reading experience.

Put together, the economic data coming out of the second quarter of 2014 does not paint a bright picture of the economy.

A recession was averted, but the Reserve Bank said the 0.6% “barely positive growth rate was extremely disappointing given the country’s development needs, and was mainly brought about by the drawn-out industrial action in the platinum mining subsector – which started on January 23 2014 and only came to an end five months later.”

The strike caused a sharp contraction in mining output in the first quarter of the year, and a “further but less drastic decline” in the second.

It also affected manufacturing.

The agricultural sector, however, showed strong growth in output, boosted by a bumper maize crop.

Fixed capital expenditure “decelerated abruptly”, capital outlays by private business and public corporations declined and business confidence fell.

There was an increase in foreign investment, but outflows also increased.

It has been a tough six months but today the RMB/BER business confidence index increased by five points – the first noticeable rise in more than a year.

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