South Africa’s GDP likely to grow at 0.7%y/y growth in 2016

South Africa's economy growth has slowed down amid declining commodity prices, pressured fiscal consolidation, and credit overhang conditions seen over the previous two years.  Deteriorating rand, weak purchasing power and pressure to tighten monetary policy to secure inflation expectations further weighs on the consumer confidence.

The economy avoided a recession in 2015 with GDP growing just 0.7%q/q, saar in the third quarter of 2015. Amid potential contractions in manufacturing and agriculture GDP had expanded 0.5%-1%q/q, saar in the fourth quarter of 2015.

"We see substantial risks that GDP growth stalls this year and now project just 0.7%y/y growth in 2016, marked down from 1.2% previously, and 1.3% in 2017 (1.8% previously) - JP Morgan. We expect household consumption expenditure (HCE) growth to slow to 0.8%y/y this year and 1% in 2017, from an estimated 1.5% last year"