Outages push economy into shock contraction
26 August 2015 - 10:42
A shock contraction in the economy in the second quarter poses a quandary for the South African Reserve Bank. It may have to postpone further interest rate increases while the Treasury could hold off on tax hikes in the medium term to avoid greater damage to the ailing economy, The Business Day reported.Statistician-general Pali Lehohla said the 1.3% annualised contraction in gross domestic product (GDP) was sobering for policy makers targeting growth of more than 5% through the National Development Plan. GDP rose 1.3% in the first quarter."Those who set these targets now have to sit up straight and say ‘what are we going to do to ensure that we get to that target’ and I think that is the significance of these numbers."..
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