SA’s Q4 GDP disappoints while a VAT increase is still likely; US survey data highlights concerns
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In this podcast, STANLIB Chief Economist Kevin Lings notes that SA’s economy grew by a disappointing 0.6% q/q in Q4 2024, and by merely 0.9% on an annual basis. This continues a long-term trend: over the last 10 years, the country’s GDP growth has averaged 0.8% a year. Turning this weak performance around requires policies that stimulate growth and encourage more private sector involvement.
Moving to SA’s Budget announcement on Wednesday, the focus will be on the originally mooted 2% VAT increase, says Kevin. Current consensus is that VAT is likely to go up by about 0.75%, with cuts in spending in some categories to make up the revenue deficit. However, a better plan on spending is needed in future to avoid constantly increasing taxes.
US employment data still indicates a robust labour market, Kevin says. But forward-looking survey data shows consumers becoming more worried about inflation and job security. Surveys also show that manufacturers are becoming more hesitant until there is clarity on the impact of import tariffs.
Click here to listen to the podcast.
Moving to SA’s Budget announcement on Wednesday, the focus will be on the originally mooted 2% VAT increase, says Kevin. Current consensus is that VAT is likely to go up by about 0.75%, with cuts in spending in some categories to make up the revenue deficit. However, a better plan on spending is needed in future to avoid constantly increasing taxes.
US employment data still indicates a robust labour market, Kevin says. But forward-looking survey data shows consumers becoming more worried about inflation and job security. Surveys also show that manufacturers are becoming more hesitant until there is clarity on the impact of import tariffs.
Click here to listen to the podcast.
