Thu. Feb 27th, 2020

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IMF Lowers Growth Forecasts For SA Economy

A man walks past the International Monetary Fund (IMF) headquarters in Washington DC on 5 September, 2018. Picture: AFP

JOHANNESBURG – The International Monetary Fund has lowered its growth forecasts for the South African economy in 2020 and 2021, citing structural constraints and deteriorating public finances.

The IMF now sees the economy growing at 0.8% this year, down from a previous forecast for 1.1%.

It sees growth for next year at 1%, which is down from an earlier prediction of 1.4% growth.

There is general consensus that nationwide power cuts have dented economic output and sapped investor confidence in the economy.

Ailing state-owned utility Eskom, which generates more than 90% of the country’s electricity, is struggling to meet demand because of breakdowns at its coal-fired power plants.

A number of businesses have expressed concerns that the cuts were crippling growth, which was threatening jobs.

In comparison, the IMF has maintained its growth projections for Nigeria at 2.5% for this year and the next.

Nigeria has been recovering slowly from a 2016 recession, thanks partly to a recovery in its crucial oil sector.

EWN