Economist on growing a sustainable economy
Following credit ratings agency, Moody's decision to keep South Africa's rating unchanged with a negative outlook - an economist says the country needs to see an acceleration in fixed investments in the private sector.
Moody's released their data on Friday, warning that the negative outlook is due to continuing political tensions and weak economic growth.
FNB chief economist, Sizwe Nxedlana says an acceleration in fixed investments within the private sector is the most sustainable way to grow the economy.
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Nxedlana adds that growing the economy by reducing spending is correct - but not sustainable.
He says investments would lead to greater industrial production and a better export performance.
"Unfortunately, the private sector is not investing because they are telling us that they are severely lacking confidence and when we asked them what's the main constraint - according to the business confidence surveys on business confidence - they cite a low domestic demand," he said.