“It’s a big step forward to not have power disruptions, but (we’re) not there yet in terms of all the other constraints,” said Lisette IJssel de Schepper, chief economist at the Bureau for Economic Research (BER).
After the marked improvement in Eskom’s performance this year, inefficiencies at Transnet are among the biggest unresolved issues.
FASTER GROWTH AHEAD?
Factory activity also slumped in August, indicating business conditions remain highly volatile in key sectors.
IJssel de Schepper said growth could start to pick up from the fourth quarter.
One reason is a government pension policy reform that came into effect on September 1. It will allow fund members to withdraw some of their savings before retirement age.
The central bank estimated withdrawals could be between R40bn and R100bn by the end of the year, boosting household consumption spending and GDP growth.
Another factor is that the central bank is expected to start cutting interest rates from this month for the first time in four years.
The BER forecast 2.2% growth in 2025, up from 1% this year, but said for that to be sustained there needs to be progress with reforms to enhance the country’s growth potential.
Reuters