Thursday, June 06, 2019 / 04.o5PM / Proshare
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Recent Q1, 2019 GDP figures for South Africa showed a major -3.2% decline more than double market expectations. The decline signals the need for major economic policy adjustments by President Cyril Ramaphosa.
The volatile primary sector shrunk -11.4%, driven by a drop in mining and agriculture, while the slide in manufacturing led to the -7.4% contraction in the secondary sector.
According to Dr. Andrew Nevin, the Chief Economist of Price Water House Coopers (PwC), Nigeria means that President Ramaphosa must appreciate the need to take bold structural reforms.
South Africa which is among the top three largest economies in Africa, reported a disappointing growth rate in the first quarter of the year attributed to global headwinds of protectionism, trade anxieties and emerging market risk aversion.
It could also explain the recent position of World Bank President Mr. David Malpass that weak investments and the slowdown in global trade are affecting the growth of emerging market economies.
PwC’s Nevin was of the view that the economic team of South Africa have their work cut out for them to lead the Southern Africa giant to a path of sustainable and inclusive growth.
The Canadian born-economist believes this is the time for Ramaphosa to reposition the South African economy presently riddled with structural challenges that have persisted since the administration of his predecessor Mr. Jacob Zuma.
Already Moody, a global economic rating agency, has expressed fears that South Africa may be on the path to another recession if nothing drastic happens.
Moody also agrees with Dr. Nevin that President Rampahosa needs to adopt real-time reforms to enhance the growth prospects of the South African economy.