Johannesburg, May 31 (IANS) South Africa would maintain modest economic growth this year, with an expectation of a gradual recovery in domestic demand and supply, said the Reserve Bank.
The household consumption expenditure continues to provide the primary impetus to the recovery of the domestic economy, the bank said in its Monetary Policy Review (MPR), which is released twice a year.
The probability of future growth remains high, the bank said Wednesday, warning the increased uncertainty in Europe and associated global financial market turbulence will pose a downside risk to the modest economic growth in the coming months in South Africa, reported Xinhua.
The bank put the European debt crisis as the single biggest risk to the global economic recovery, saying confidence in the global economic recovery is extraordinarily fragile because of the still-unresolved sovereign debt crisis in Europe. The new economic entities in the world would face the possible risk of the financial shocks emanating from the European economic volatility, it said.
On Tuesday, Statistics South Africa said the South Africa's GDP increased by 2.7 percent in the first quarter of 2012, slowing down from 3.2 percent in the last quarter in 2011.