Giant financial institution Barclays Africa has estimated that the South African economy might grow by 2.1% this year, a positive development compared to last year’s anticipated 1.4%, attributed to high consumer spending, minimized strikes, and the benefits of oil prices.
As such, the economy will increase by 2.9% in 2016. Interest rates will stay put for the part of this year and will only be trampled by 25 basis points in September when Reserve Bank maintains its ongoing rate-hiking cycle.
Peter Worthington, a senior economist at Barclays Africa their 2015 economic projection might have been higher if power supply was unwavering.
“Because there is no significant new generating capacity likely to come on line very quickly except possibly one unit of Medupi but that is not enough to rescue us”.
Medupi’s Unit 6 is anticipated to begin accumulating to the power grid mid this year.
Barclays Africa anticipated inflation to an average of 3.8% this year from an approximated 6.1% average last year presupposing an oil price of about $50 a barrel. Lower oil prices have resulted to momentous petrol price cuts in recent months and slowing inflation.
Worthington was convinced government will meet its budget deficit targets due to, “on track revenue collections to date”.