Unresolved policies, global uncertainty risk harming growth
22 February 2017
Cape Town – Global uncertainty and unresolved mining, land and broadband issues pose the biggest risk to South Africa’s more positive growth outlook, said Finance Minister Pravin Gordhan in his 2017 Budget Review.
A weakening of the world trading system and a deterioration in the domestic policy environment would likely translate into lower economic growth, declining business and consumer confidence, reduced exports and greater capital flow volatility.
“Such a scenario could result in a lengthy period of weak growth (a low growth trap) or a domestic recession, followed by a slow recovery,” Gordhan cautioned.
Rising interest rates in advanced economies, such as the United States, could reduce capital flows into developing economies and expose their vulnerabilities.