South Africa finance minister warns over slow economic growth

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South Africa’s economic growth is expected to slow to 1.9% in 2022, says finance minister Enoch Godongwana.

The minister said this in the National Assembly on Wednesday while delivering the 2022 Medium Term Budget Policy Statement at the Cape Town City Hall.

By the same token, Treasury forecast headline inflation of 6.7% for 2022. It projects that inflation would decline to 5.1% in 2023. High domestic food inflation and elevated fuel price were key sources of inflationary pressure. Food inflation this year averaged 8.5%, driven by rising bread, cereals and meat prices.

In this regard, the country’s economy grew by 1.4 % in the first half of 2022 compared with the first half of 2021. The National Treasury in the MTBPS said the supportive external environment and commodity price levels that contributed to a faster than-expected recovery from COVID-19 lows were dissipating.In addition, some of the risks outlined in the 2022 Budget had materialised, including slower global growth from supply chain disruptions and stringent lockdown restrictions in China, surging inflation and tighter monetary policy stances.

“Recent events underline the importance of rapidly implementing the economic recovery plan, including through Operation Vulindlela, to narrow the gap between South Africa’s poor economic outcomes and its aspirations,” it said.

 

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