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With GDP up 3.1% in the second quarter of 2019 (seasonally adjusted, annualised) and 0.9% for the year to June 2019, the markets have responded positively. The rand appreciated by some 10 cents on publication of the data and bonds yields declined by about 10 basis points.
The Q4 2018 GDP growth numbers are encouraging in light of the tough environment that we have just emerged from. Given that we came out of a technical recession in 2018, the turnaround to see positive growth for the full year is heartening. And while it may still not be enough to address many of our structural issues, the positive signs are likely to keep the rating agencies at bay.
Reality can be avoided for only so long. The South African economy has slipped into its first technical recession since 2009. Cyril Ramaphosa’s confidence in growth for the economy has proven hollow. Without a change in the size and the amount of control the state has grasped over the lives of South Africans, without a change in policy from socialism to free markets, this recession was inevitable.
Craig Pheiffer | Chief Investment Strategist | Absa Stockbrokers & Portfolio Management | email@example.com | www.absa.co.za | The Medium-Term Budget Policy Statement (MTBPS) - often referred...