SARAH BULLEN in Johannesburg | Tuesday 6.00pm.
SOUTH Africa is experiencing a slowdown in economic activity, with economic growth weak and the current indicator of employment in the formal sectors of the economy having declined to its lowest level in nearly twenty years, was the word from Reserve Bank governor Chris Stals on Tuesday.
Announcing the Bank’s annual report in Pretoria, Stals said that it was only since May 1998 that South Africa experienced the full impact of the East Asian meltdown, as international investors reassessed the risk of emerging market economies. Backtracking on earlier predictions of economic recovery, Stals said that these events have “delayed for a while the anticipated recovery in overall real economic activity”.
Disappointing quarterly figures that showed economic growth, measured in terms of has dwindled to 0,3% Figures released on Monday showed that first quarter growth of 0,5% in gross domestic product had dropped to the equivalent of 0,3 percent annual growth in the second quarter — mainly due to a substantial reduction in the rate of growth in agricultural output.
South Africa’s economy grew by 1,7% in 1997, down from 3,2% in 1996.
On an upbeat note, Stals said that the current account deficit narrowed in the first half of 1998 to a seasonally adjusted and annualised average value of R7,1-billion, or 1% of gross domestic product, down from R8,8-billion in 1997.
Economists generally agreed that Stals’s address held no major surprises, although some said they were expecting him to provide more direction on monetary policy.