IMF dims SA growth prospects

2012-08-23 19:15

Johannesburg - The International Monetary Fund slightly dimmed South Africa's 2012 growth forecast to 2.6% on Thursday and warned that chronic joblessness was a risk to the continent's biggest economy.

"If not addressed, the stubbornly high unemployment rate could become politically and socially unsustainable," an IMF report said.

Released after a visit by IMF representatives three months ago, the study also warned of external risks from the eurozone and a Chinese slowdown that could see less demand for exports and a further decline in commodity prices.

The Fund revised lower a forecast for growth of 2.7% issued in May.

"Although the 2012 GDP growth rate is likely to moderate to about 2.6% given the weak external conditions and heighted global uncertainty, it is projected to gradually recover over the medium term to its potential rate of about 3.5%," it said.

The forecast for 2013 was cut from 3.6% to 3.4%.

Some key domestic risks identified were the high unemployment rate, which officially hovers around 25%, and the ballooning cost of public sector wages.

"The growing public sector wage bill is a concern and the composition of spending needs to be rebalanced away from the wage bill and toward capital spending," said the report.

The National Treasury welcomed the assessment, saying "many of the issues raised by the IMF report are already reflected in the priorities and outcomes that government has set itself".

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  • hendrikvs - 2012-08-23 19:39

    Nou gaan hulle eers steel!

  • braamc - 2012-08-23 20:10

    It is like cANCer, a filthy life threatening disease

  • visko.vandermerwe - 2012-08-24 00:00

    The ballooning costs of public sector wages. And what does the SA's get for it?

  • struan.g.lloyd - 2012-08-24 00:18

    The imf have their own agenda. If we stick together and work hard nothing will stop us!

      mark.barker.370 - 2012-08-24 07:39

      Moron - everything the IMF said is true , in fact I believe they are sugar coating it. I fail to see how standing together can solve the deep structural and leadership challenges facing the SA economy.

  • peter.fraser.92754 - 2012-08-24 04:53

    "The white man must give us our money "....the Honourable Malema. Miners demanding R12500 per month. With racially inflamed statements from Malema the only growth will be black on white violence. With demands like that, no mine will employ more people. We are stuffed ....period.the Government is to lame to tame Malema and the mine shareholders to greedy.DISASTER.Oops forget, the unions only looks after the employed and Cosatu are speechless at the moment.

  • quartus.vanzyl - 2012-08-24 11:03

    Wander if the government is taking notice of this report. And if so, what it is planning to do? Maybe creating more public service jobs?

  • ike.jakson - 2012-08-27 05:26

    This kind of news should make South Africa think; it is no joke. The IMF is not “the purest example of innocence” but we should take note.

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