Growth will rebound only slightly in 2017 and 2018, after a sharpslowdown in 2016. Elevated unemployment and sluggish creditgrowth will weigh on private consumption, while fiscal consolidationlimits government spending. Elevated policy uncertainty and a pooroperating environment will act as a continued headwind to investment.
We expect South Africa's fiscal deficit to narrow, though at a slowerpace than anticipated by the government. Weak economic growthwill act as a headwind to fiscal revenues.
Ahead of the December 2017 National Elective Conference, the riskof severe party infighting remains elevated. Thereafter, neither ofour most likely scenarios (a victory by Nkosazana Dlamini-Zuma orCyril Ramaphosa) are likely to lead to substantive reformMajor Forecast Changes