“It's a big step forward to not have power disruptions, but (we're) not there yet in terms of all the other constraints,” said Lisette IJssel de Schepper, chief economist at the Bureau for Economic Research (BER).
After the marked improvement in Eskom's performance this year, inefficiencies at Transnet are among the biggest unresolved issues.
FASTER GROWTH AHEAD?
Factory activity also slumped in August, indicating business conditions remain highly volatile in key sectors.
IJssel de Schepper said growth could start to pick up from the fourth quarter.
One reason is a government pension policy reform that came into effect on September 1. It will allow fund members to withdraw some of their savings before retirement age.
The central bank estimated withdrawals could be between R40bn and R100bn by the end of the year, boosting household consumption spending and GDP growth.
Another factor is that the central bank is expected to start cutting interest rates from this month for the first time in four years.
The BER forecast 2.2% growth in 2025, up from 1% this year, but said for that to be sustained there needs to be progress with reforms to enhance the country's growth potential.
Reuters
Economy gains momentum but not as much as forecast
Improved power availability helps bolster growth but bottlenecks at ports and on railways serve as drag
Economic growth picked up in the second quarter, supported by higher consumer spending and power availability, but output declines in agriculture, mining and transport meant growth was slightly weaker than expected.
GDP expanded 0.4% in quarter-on-quarter seasonally adjusted terms in April to June, below the 0.5% growth forecast by economists polled by Reuters, but above the first quarter's flat output.
South Africa's top statistics official said it was too early to say whether the coalition government that emerged after May's elections had contributed to the improved second quarter performance since President Cyril Ramaphosa was only sworn in for a second term in mid-June.
“Even in the next quarter, it would be too early to tell about the effects of the government of national unity,” statistician-general Risenga Maluleke told reporters.
Seven of the 10 sectors tracked by Stats SA registered growth in the latest three month period as the economy benefited from an unbroken stretch without power cuts for the first time in years.
But economists said lingering bottlenecks at ports and on the freight rail network and weak global demand remained a drag.
“It's a big step forward to not have power disruptions, but (we're) not there yet in terms of all the other constraints,” said Lisette IJssel de Schepper, chief economist at the Bureau for Economic Research (BER).
After the marked improvement in Eskom's performance this year, inefficiencies at Transnet are among the biggest unresolved issues.
FASTER GROWTH AHEAD?
Factory activity also slumped in August, indicating business conditions remain highly volatile in key sectors.
IJssel de Schepper said growth could start to pick up from the fourth quarter.
One reason is a government pension policy reform that came into effect on September 1. It will allow fund members to withdraw some of their savings before retirement age.
The central bank estimated withdrawals could be between R40bn and R100bn by the end of the year, boosting household consumption spending and GDP growth.
Another factor is that the central bank is expected to start cutting interest rates from this month for the first time in four years.
The BER forecast 2.2% growth in 2025, up from 1% this year, but said for that to be sustained there needs to be progress with reforms to enhance the country's growth potential.
Reuters
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