IMF cuts growth forecast for SA

2012-10-09 08:29

Tokyo - The International Monetary Fund (IMF) on Tuesday cut its 2012 forecast for Africa along with most other countries around the world as the eurozone crisis dampens global demand and higher food prices weigh on food-importing countries in the region.

In its latest World Economic Outlook, the IMF shaved its 2012 projections for Africa to 5% from 5.4%. However, it revised up its 2013 outlook to 5.7% from 5.3%.

The fund said spillovers from the eurozone crisis into Africa have so far been modest except for South Africa, which has close financial and trading ties with Europe.

The IMF cut its 2013 forecast for South African growth to 3% from a July projection of 3.3% mainly due to the impact from the continuing eurozone debt crisis. It maintained its 2012 projection of 2.6%.

"If the euro area crisis escalates further and global growth slows further, Sub-Saharan Africa's prospects will be less favorable," the IMF said.

"South Africa, strongly linked to Europe, would be particularly affected, with possible repercussions for some economies in southern Africa," the Fund said, "Softer commodity prices would adversely affect the region's natural resource exporters," it added.

The IMF cautioned that African countries could also be hit if China's economy slowed sharply. China's economic growth is expected to be the lowest in more than a decade this year.

Increasing Chinese foreign direct investment and government funding to African countries has made it an important player in the region.

"The priority in much of the region is to continue to strengthen policy buffers and prepare contingency plans if downside risks materialise," the IMF added.

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  • EricksonTL - 2012-10-09 08:49

    Lol. 'Europe.' So much more politically correct than 'murderous striking so and so's.' When are these international organisations going to stop trying to be PC, and start telling it like it is? Until they do, nothing will change - unless it's to get worse!

  • osmaseko - 2012-10-09 08:51

    mxm they are busy telling us about investor confidence when miners are on strike but they can't even maintain their own economies i.e eurozone crisis double standards here....

      EricksonTL - 2012-10-09 08:55

      And yet, the Rand is falling even against the Euro... The ANCYL and their murderous miners and strikers are going to strangle the last spark of life out of the SA economy. Then again, it should make the communists happy - EVERYONE will be unemployed and starving, and isn't that what equality is all about?

      glen.e.huysamer - 2012-10-09 13:26

      Yes Osmaseko probably the same bunch of cronies that cause this massive financial crises to happen with their greedy short term bonus scheme's and self enrichment. The European Union financial crises was going to affect South Africa with or with out strikes, so what are they trying to say now? WARN US? We should internalize our resources, grow our local economy, hold our coal, build industry and shut our borders and ignore these 'poophalls' who are responsible for the global financial crises, what a cheek,...this IMF. they come here lend billions from South Africa, and all they can do and say is blatantly obvious, why does anybody pay these guys, what the heck do they actually do? Some world governing body made up of a self proclaimed hierarchy, who butts into every other countries business for a fee, and not a cheap fee either.

  • william.letsong.5 - 2012-10-09 09:26

    I'm almost certain that Cosatu will ignore this news. They will continue calling on their lazy unproductive members to do some work in the streets by breaking, burning and killing people. Vavi knows absolutely nothing about an economy, the only thing the fool knows is how to strike. We are doomed fellow South Africans! At least we are aware of what is to come. I feel sorry for the uneducated poor who knows nothing just like Vavi. A difficult period is looming and the only thing that is a concern for our \government\ is who's gonna lead the party after Mangaung. We really need to brace ourselves people. We seriously need to forget about our differences and quickly learn how to live and work together. We need new leaders and a new political party to close the gap.

      DuToitCoetzee - 2012-10-09 09:57

      William. Vavi and Cosaato got such a wake up at Marikana that they now will do strikes and marches...everything, to make sure their "investors" do not turn their backs on them. After all, Cosato in an "Investment House" and if one lose one's "investors" hungry and lack of power will knock on the door.

      DuToitCoetzee - 2012-10-09 09:58

      William. Your comment is spot on.

  • grant.montgomery.5074 - 2012-10-09 19:02

    @ Jamba. "The IMF is a European institution" Wrong. 188 countries are members with equal say. The HQ is in Washington. Correct me if I'm wrong but i would say you are an ANC member, the reason being the trolls always suck facts and figures out of their thumbs to suit what they want to convey

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