IMF cuts SA’s economic growth forecast by almost half

As country struggles to cope with a plunge in metal prices.

The International Monetary Fund cut its economic growth forecast for South Africa by almost half to less than 1% as commodity prices slump and global demand remains weak.

Gross domestic product in Africa’s most industrialised nation will probably expand 0.7% this year, compared with October’s estimate of 1.3%, the Washington-based lender said in an update to its World Economic Outlook report on Tuesday. The IMF cut its projection for 2017 by 0.3 percentage points to 1.8%.

South Africa’s economy is struggling to cope with a plunge in metal prices, fueled by a slowdown in its biggest export market, China. Barclays Africa Groupon Monday cut its 2016 GDP growth forecast for South Africa to 0.9% from 1.4%, while Bank of America Merrill Lynch slashed its projection by a full percentage point to 0.4% last week.

Finance Minister Pravin Gordhan is set to announce new growth forecasts in his budget speech next month. The government had projected expansion of 1.7% for this year.

The IMF lowered its growth estimate for sub-Saharan Africa for this year by 0.3 percentage points to 4% and reduced next year’s estimate by 0.2 percentage points to 4.7%. That “mainly reflects the continued adjustment to lower commodity prices and higher borrowing costs, which are weighing heavily on some of the region’s largest economies,” it said.

©2016 Bloomberg News

COMMENTS   4

Sort by:
  • Oldest first
  • Newest first
  • Top voted

You must be signed in and an Insider Gold subscriber to comment.

SUBSCRIBE NOW SIGN IN

Less than 1%. The whole GDP is driven by Gupta only. He sells wet coal to Eskom at inflated prices and thrives on corruption within government. If it wasn’t for Gupta we would have been in a recession.

Regrettably the laughing President will not know what this means and Pravin will say it is wrong anyway. However it is more likely to be true than anything the ANC put forward. Expect very tough times in SA for a number of years. Unemployment will sky rocket as will inflation and interest rates. Remember prime at 25%? It might well come back. And Zuma carries on not being stressed. Astonishing man, most unsuited to be a manager let alone a President of a country. So R 20 for one dollar looks pretty on for Dec 2016?

Manager?

I wouldn’t even have him wash my car.

He would probably break the windows.

R20/$ is a given.

And while Rome burns…… our chief court jester is eating and giggling his way through Davos at tax payers expense. Whatever Pravin Gordhan does, will be drastic damage control. Either way every citizen is going to pay a price when the repercussions happen.

End of comments.

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR
BTC / USD

Subscribe to our mailing list

* indicates required
Moneyweb newsletters

Instrument Details  

You do not have any portfolios, please create one here.
You do not have an alert portfolio, please create one here.
INSIDER SUBSCRIPTION APP VIDEOS RADIO / LISTEN LIVE SHOP OFFERS WEBINARS NEWSLETTERS TRENDING

Follow us:

Search Articles:
Click a Company: