Johannesburg - Economists cut their forecasts for South
Africa's economic growth for this year and the next two due to the impact of the
ongoing eurozone debt crisis, a Reuters poll showed on Thursday.
Seventeen economists surveyed for the November Econometer
poll showed gross domestic product (GDP) growth was expected to average 3.1%
this year, slowing to 3.0% in 2012 and 3.7% in 2013, all forecasts lower than
those given in the previous poll just a month ago.
"The outlook for 2012 is less comforting. Against our
baseline 2012 GDP forecast of 3.4% for South Africa, there is substantial
downside risks from the European growth trajectory," said Absa Capital in
a note.
The eurozone is South Africa's largest trading partner and
local leaders have said the longer the debt crisis continues unresolved, the
worse its effects will be on the country.
The National Treasury also cut its growth forecast for 2011
to 3.1%, citing worries about sluggish global growth at the release of its
three-year fiscal framework in October.
Reserve Bank governor Gill Marcus said the risk of
stagflation in Africa's largest economy was rising due to the global crisis.
Data this week showed economic growth for the third quarter
came in less than expected at 1.4% as mining, manufacturing and agriculture
contracted, hit by sharply lower exports.
The central bank has this year left the repo rate unchanged
at 5.5%, after reductions totalling 650 basis points between November 2008 and
November 2010.
The November Econometer poll showed interest rates were
expected to remain flat next year due to worries about the economy. The repo
rate is seen ending 2012 at a median 5.5%, compared with forecasts of 6% in the
previous poll.
"It seems that we are more dependent on the global
recovery than domestic demand. If that is the case, then let's expect interest
rates to remain low for an extended period," said Eskom economist Mandla
Maleka.
Partly due to the eurozone crisis, investors have been
dumping high risk assets such as the rand which has lost about 23% against the
dollar so far this year.
Analysts were more bearish on the currency than they were
previously, seeing the rand end 2011 at 8.05, weaker than the 7.80 forecast in
the October poll. The rand was seen ending 2012 at 7.94, compared with 7.86 at
the October poll.
The Reserve Bank has said the weaker rand is an upside risk
to inflation.
Forecasts for inflation in 2012 rose and were seen averaging
5.97% in 2012, compared with forecasts of 5.8% in the previous poll.
Inflation hit the upper end of the 3% to 6% target band at
6.0% year-on-year in October. The Reserve Bank expects it to peak at 6.3% in
the first quarter of next year, and return to the target band towards the end
of 2012.
The Econometer index was largely steady at 271.25, compared
with 271.51 in October.