1 2. Economic outlook In brief The Economic growth estimate for 2016 has been revised down to per cent from per cent. The National Treasury forecasts a moderate recovery over the next three years, with GDP growth reaching per cent in 2019 as supply-side constraints become less binding, the global economy recovers, and business and consumer confidence rebound. The inflation forecast has been revised down to per cent for 2016. Inflation is expected to remain close to 6 per cent annually over the medium term, with upward pressure from electricity prices.
2 Household consumption expenditure growth is projected to reach per cent in 2019. Investment by general government is expected to average per cent growth over the medium term, with investment by public corporations reaching per cent growth in 2019. Government has budgeted billion for infrastructure over the next three years, with large investments continuing in energy, transport and telecommunications. Fiscal and monetary policy support a sustainable recovery in Economic activity. Rapid progress on National Development Plan reforms can bolster confidence and promote investment.
3 Economic growth and transformation T. o achieve the goal of Economic transformation and build an Low growth threatens to equitable society, south africa requires higher growth. Without block south africa 's decisive action, a protracted period of low growth will set back the Economic transformation country's ability to realise the constitutional vision to improve the quality of life of all citizens and free the potential of each person . The National Development Plan (NDP) recognises that faster, broad-based growth is needed to transform the economy, create jobs, and reduce poverty and inequality.
4 While global Economic weakness plays a large role in south africa 's Economic growth performance, domestic constraints stand in the way of investment, output and trade. The slow pace of finalising policy interventions in areas such as land reform, immigration, labour relations, mining and communications undermines confidence, which is a key determinant of Economic activity. Government must demonstrate more rapid implementation to restore confidence and give hope to citizens. 9. 2016 MEDIUM TERM BUDGET POLICY STATEMENT.
5 Fiscal framework and south africa 's strong institutions, stable macroeconomic environment, monetary policy stance well-developed financial markets, relatively high levels of innovation support sustainable capacity and strategic position in the region provide a solid platform for recovery in economy stronger growth. The fiscal framework and the monetary policy stance support a sustainable recovery in Economic activity. Government continues to prioritise infrastructure investment to ease bottlenecks and raise the economy's potential growth rate.
6 Public-sector infrastructure budgets total billion over the next three years. Continued investment in energy, transport and telecommunications will boost internal and external trade efficiency. Efforts to expand co- investment with the private sector, alongside a series of other NDP reforms discussed later in this chapter, will build confidence and encourage job creation. Figure GDP growth and business confidence, 2005 2016. Business confidence GDP growth (right axis). 90 75. Percentage change (q-o-q). 60.
7 45. Index 30. 15. 0. -15 Sep 2005. Mar 2006. Sep 2006. Mar 2007. Sep 2007. Mar 2008. Sep 2008. Mar 2009. Sep 2009. Mar 2010. Sep 2010. Mar 2011. Sep 2011. Mar 2012. Sep 2012. Mar 2013. Sep 2013. Mar 2014. Sep 2014. Mar 2015. Sep 2015. Mar 2016. Sep 2016. Source: RMB BER Business Confidence Index, Stats SA. Global outlook World economy forecast to The global recovery from the 2008 financial crisis remains precarious, grow by per cent in with growth forecast at per cent in 2016 and per cent in 2017. In 2017 developed economies, the combination of weak Economic growth, low or negative interest rates, and elevated asset prices has increased the likelihood of renewed financial volatility.
8 World trade growth forecasts for 2016 have been reduced from per cent in April to per cent in October. Global debt has risen to US$152 trillion more than double the size of the world economy. About two-thirds of this amount is private- sector debt, and public-sector borrowings have also increased sharply. Risks to global outlook Risks to the global outlook include excessive debt levels, further include excessive debt, deterioration in Chinese growth rates, continued declines in commodity weaker growth in China and prices and political uncertainty in several major economies.
9 Over the short political uncertainty term, the United Kingdom's intention to leave the European Union (EU). will remain a source of financial volatility, alongside concerns about the health of major European banks. Brexit's long-term effects, including on south africa , depend on timing and the nature of trade and investment treaties to be negotiated with the EU. 10. CHAPTER 2: Economic outlook . The outlook for developing economies is mixed. GDP growth is projected to remain resilient in India and in China.
10 A return to moderate Economic growth is expected in Brazil and Russia in 2017, following two consecutive years of Economic contraction. Table Annual percentage change in GDP and consumer price inflation, selected regions/countries, 2015 2017. Region / country Average GDP growth1 Average Average CPI1. Percentage 2010 2014 2015 2016 2017 2010 2014 2015 2016 2017. World Advanced economies US Euro area UK Japan Emerging markets and developing countries Brazil Russia India China Sub-Saharan africa 2. south africa 1.