The South African consumer is likely to be less of an influencing driver of economic growth going forward. This is according to Standard Bank Chief Economist Goolam Ballim.
According to Ballim, a combination of anticipated higher inflation, interest rates and lower household incomes will put a brake on discretionary spending.
Standard Bank says it expects the economy to grow by 0.8 percent this year - that's in line with the World Bank's latest forecast.
The grim economic outlook continues to make it difficult to deal with long standing societal plagues, namely unemployment, inequality and poverty.
Standard Bank says it expects that the oil price could rise as non-OPEC (Organization of the Petroleum Exporting Countries) countries reduce their oil production on the back of currently lower oil prices, which make it unprofitable to produce.
Economists say South Africa's Gross Domestic Product does not have the potential to grow beyond 2% over the next three years.
Balim says economic prospects for the country remain weak. He says the global economy will likely remain at lower levels for a long time.
“If we look at our GDP prospects, we have subsided quite materially compared to years where we were almost drawn roughly 5% annually over that period. “
Balim thinks the economy will grow by 0.8% .
“We do think we might master 1.7% next year but what you are getting a sense of is that South Africa does not have the potential to grow faster than 2%."
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