SA likely to dodge recession due to consumer-led rebound
South Africa's economy likely avoided a recession in the second quarter, with improvements in manufacturing, retail, and wholesale trade sales.
Stronger readings from manufacturing, retail and wholesale trade sales shows parts of the economy have turned positive that were a drag in the three months through March — when output shrank 0.1% — amid a clear improvement in national electricity supply. A softer inflation reading would support consumers by boosting spending power and encouraging the central bank to start lowering South Africa’s painfully high interest rates next month.
That doused fears that the ANC would ally itself with leftist rivals including former President Jacob Zuma’s uMkhonto weSizwe Party and the Economic Freedom Fighters. To be sure, Africa’s most-industrialised economy still faces headwinds. It’s only forecast to expand a meagre 1% in 2024, before picking up to 1.7% next year. But that would still be an achievement after averaging barely 1% for the past decade.
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