Renewed confidence surrounding the South African economy
|Confidence towards the South African economy received a boost on Tuesday, following the news that economic growth accelerated for the first time since 2013. Quarterly GDP growth during the final quarter of 2017 expanded by 3.1%, with the South African economy growing by 1.5% on an annualized basis.
It is the quarterly GDP reading at 3.1% that really impressed, when you consider that the forecast was 1.5%. While the South African economy still has some distance to go when it comes to realizing its potential, if economic announcements can maintain this type of momentum it will increase economic sentiment towards the South African economy.
The stronger than expected GDP reading could also reduce fears of another credit downgrade. It can be added that the Rand reacted positively to the data announcement, strengthening by 0.85% against the Dollar at time of writing today.
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