Economists not surprised by revised growth outlook of 0%

The South African Reserve Bank's MPC kept the repo rate unchanged.

Picture: EWN.

JOHANNESBURG - Economists say the revised growth outlook of zero percent for South Africa in 2016 isn't surprising when taking into account global growth and local pressures since January.

South African Reserve Bank Governor Lesetja Kganyago announced yesterday that growth is subdued and that the repo rate would remain unchanged.

Kganyago said that a number of nations were struggling to grow their economies and that South Africa was no different.

Economist at Pan African Investment and Research Dr Iraj Abedian said: "Formal agencies, the National Treasury and now the Reserve Bank has scaled down their growth projections consistently."

But FNB Chief Economist Sizwe Nxedlana says that keeping rates unchanged is still good news for cash-strapped consumers.

"What it means is that we get a reprieve from the rising cost of servicing debts, which is a good thing in an environment where growth is exceptionally weak."

The rand strengthened following the rates announcement but Kganyago has warned that the currency is expected to remain volatile.