Gigaba: GDP growth is encouraging but it's too early to celebrate

Malusi Gigaba says poverty, unemployment and inequality underpinned by slow growth remain the main challenges to the economy.

FILE: Finance Minister Malusi Gigaba. Picture: EWN.

PRETORIA - The National Treasury has welcomed South Africa breaking from a technical recession but warns it's still too early to predict whether there will be sustained growth.

Stats SA's second quarter GDP figures put quarter-on-quarter growth at 2.5%.

Finance Minister Malusi Gigaba says the GDP growth is encouraging but it is too early to celebrate.

The Minister says poverty, unemployment and inequality underpinned by slow growth remain the main challenges to the economy.

Econometrix chief economist Azar Jammine believes the figures are not representative of true growth in the economy.

“Bearing in mind that the Cabinet reshuffle that destroyed a lot of business confidence took place at the end of March and that was followed by credit ratings downgrades, it seems remarkable on the face of it that you should start seeing such an improvement in the second quarter.”

ANC WELCOMES LATEST GDP FIGURES

Meanwhile, the African National Congress (ANC) has welcomed the latest GDP figures.

Secretary General Gwede Mantashe says there is more the ANC needs to do to improve the lives of South Africans.

“When we’re making some improvements, much more still remains needs to be done. The national conference must be seized with work of advancing the strides we’ve made to improve the lives of our people.”

Annual growth is projected at 0.5%.

(Edited by Winnie Theletsane)