SA's slow growth, recession and what this means going forward

Stats SA released the latest GDP figures, showing that the country has entered a technical recession with growth contracting in two consecutive quarters.

Economist Lumkile Mondi explains in more detail, what's led to this and what it means going forward.

READ: South Africa enters technical recession - Stats SA

ALSO READ: SA economy has lost its momentum- economist

GDP narrowed by 0.7% in the first quarter of 2017 compared to a contraction of 0.3% in the last quarter of 2016.

With the economy growing so slow it means our expected revenue collection from the South African Revenue Services is going to continue declining which means we are going to have to borrow more. Given the recent downgrades it means that we may have to start looking at tax increases.

Lumkile Mondi , Economist and senior lecturer at Wits University School of Economics

There is no confidence in the economy, with the consumer and business.

Lumkile Mondi , Economist and senior lecturer at Wits University School of Economics

Mondi attributes the lack of confidence partly to political uncertainty, namely the cabinet reshuffle, which was followed by the downgrade. He says all these events have led to people not trusting where the South African economy is going, as well as the rhetoric around radical economic transformation.

Click on the link below to listen to the full audio...


This article first appeared on 702 : SA's slow growth, recession and what this means going forward


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