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Johannesburg - South Africa faces a challenging economic environment, with growth in 2016 seen at 0.6%, entailing falling per-capita income, the International Monetary Fund said on Friday.
In a statement released after an annual mission, the IMF said it anticipated a muted recovery from 2017. Risks to the outlook were however tilted to the downside, including further shocks from China, a key consumer of South African commodities, and possible credit rating downgrades.
Africa's most developed, but stuttering economy faces the danger of ratings cuts from agencies worried that Pretoria might not stay on a thrifty fiscal path, after President Jacob Zuma inexplicably shuffled finance ministers twice in four days in December.
"Moving forward, structural reforms are imperative to reduce policy uncertainty, boost confidence, tackle structural impediments, and lower vulnerabilities," the global lender said.
It however added that the government and the South African Reserve Bank had taken appropriate steps to counter rising government debt and inflation, as well as addressing infrastructure bottlenecks, especially in the electricity sector.
Earlier on Friday, Zuma said South Africa would no longer have power cuts such as those suffered last year, as state utility Eskom had beefed up generation capacity to meet demand.
