Pravin Gordhan cannot predict economics


Map of South Africa with the Eastern Cape prov...

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Bloemfontein – It was Warren Buffett who said that when the tide goes out, you’ll find out who is not wearing a bathing suit.

The tide is currently turning for the South African economy. Although it’s still too soon to speak of another recession, we are certainly more defenceless than three years ago, at the time of the last recession.

This is the disturbing news coming from the August Sake24 and BoE Private Clients provincial barometers.

This unique index measures the economic performance of five provinces and shows that their economies contracted by an average 4.3% in the past quarter.

The biggest loser was the Eastern Cape, where the overall index tumbled 6.8%, followed by Gauteng (4.5% down).

“The provincial barometer levels are the lowest since December last year and clearly show that South Africa is currently experiencing a contraction, aggravated by rising prices and inflationary pressure,” said Mike Schüssler of Economists.co.za, who compiled the barometers.

Earlier this week Finance Minister Pravin Gordhan acknowledged that the growth forecast in his budget speech earlier this year might have been overly ambitious, in the context of current global financial problems. He predicted 4% growth over the next three years.

via SA’s buffer against recession crumbles: Fin24: Barometer.

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