Country Economic Forecasts > South Africa

GDP growth slowed to 1.3% in 2015, hit by the drought and the struggling mining and manufacturing sectors. Moreover, 2016 is widely expected to be even worse as these problems will persist while the rest of the economy will struggle against a background of extremely weak business and consumer confidence. Moreover, inflation has surged out of the central banks target range, in all likelihood leading to a continuation of the monetary tightening cycle.Moreover, the government is tightening fiscal policy under the watchful eyes of the international rating agencies. The budget presented by Finance Minister Pravin Gordhan in February was prudent, albeit lacking in substantial economic reforms that would see the economy move onto a higher growth trajectory. The National Treasury intends to accelerate fiscal consolidation despite the weaker growth outlook, but whether this will be enough to stave off being downgraded to junk status remains to be seen.