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Political uncertainty moves IMF to cut SA's growth forecast

Oct 10 2017 17:24

Cape Town - The International Monetary Fund (IMF) has cut South Africa’s growth forecast for 2017 from 1% to 0.7% due to “political uncertainty”. 

In its latest World Economic Outlook, the IMF said SA's GDP growth was expected to remain subdued, “despite more favorable commodity export prices and strong agricultural production, as heightened political uncertainty saps consumer and business confidence".

It expects growth to increase to 1.1% in 2018. 

The IMF was more positive about Sub-Saharan African economies as a whole. It expects an average GDP growth rate of 2.6% across the region, with highs of 7.6% in Côte d’Ivoire and 8.5% in Ethiopia.   

The cut to SA's projected growth puts the IMF’s 2017 forecast broadly in line with local economists.

In early September Stanlib chief  economist Kevin Lings said the investment manager expected 0.7% growth for 2017. FNB senior economist Mamello Matikinca has also said that GDP growth below 1% was expected for SA in 2017. 

Lesetja Kganyago, Governor of the SA Reserve Bank, said on September 21 that the bank's forecast for GDP growth for 2017 was 0.6%, with forecasts for 2018 and 2019 of 1.2% and 1.5% respectively.

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