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Economists paint bleak economic outlook for SA

Economists are hopeful that the economy will grow slightly in the second half of this year.

South African rand.   Picture: Christa Eybers/EWN

JOHANNESBURG - Economists agree South Africa faces an uphill battle in the second half of 2016 to avoid slipping into a technical recession.

Yesterday, Statistician general Padi Lehohla announced the Gross Domestic Product estimate for the second quarter of 2016 is sitting at 3.3 percent.

The figure represents the fastest rise in economic activity since 2014.

Economists are hopeful that the economy will grow slightly in the second half of this year in order to avoid a technical recession.

But Argon Asset Management's Thabi Leoka says this means reaching a target of at least 5%.

"For us to grow by even 1%, which is massive compared to where we are, we need to post very strong quarterly numbers above 5%."

Econometrix's Azar Jammine says there are some reasons to expect a slight improvement.

"Inflation is turning up to be lower than anticipated in addition to the effects of the drought are hopefully going to dissipate."

For now, South Africa has managed to stave off a recession, mainly due to an increase in production in mining and manufacturing.

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