Despite claims by several economists that South Africa may be heading towards a recession, Finance Minister Pravin Gordhan stated yesterday that this is not the case.
During a media briefing on Thursday 14 January, Gordhan reportedly said: “We are growing as an economy, we are not going into a recession. But we are not growing fast enough.”
However, John Cairns, currency strategist at Rand Merchant Bank (RMB), told Justmoney last week that while the weakening Rand does not indicate that we are heading for a recession, we are heading for one anyway.
According to a statement released by John Loos, household and property sector strategist at FNB Home Loans (First National Bank), on 7 January 2016 there is a high risk of recession. “The FNB Estate Agent Survey’s Residential Activity rating not only points to a near term slowing in the Residential Market. It suggests further slowing in the economy too, keeping recession risk high.”
He added: “Given that year-on-year GDP growth for the 3rd quarter of 2015 was a mere one percent, the risk of a recession thus remains high.”
For more information on the weakening of the Rand and the economic outlook for South Africa in 2016, click here.