The International Monetary Fund’s (IMF) downgrading of South Africa’s economic growth forecasts to 1.4% this year (from its 2% forecast in July) as expected, has been met with some surprise as its projections are lower than those of the South African Reserve Bank and the World Bank.
The Reserve Bank sees the economy growing 1.5% this year and 1.6% next year, while the World Bank forecasts 1.5% and 1.7% growth respectively.
In its world economic report released yesterday (Tuesday) the IMF cut the growth forecasts for the global economy, warning of increasing risks from the slowdown in China, which is dragging other emerging markets down with it.
The global economy would expand just 3.1% this year and 3.6% next year, the IMF predicted, revising downward its previous forecasts by 0.2 percentage points in both cases. Emerging economies were going through their fifth consecutive annual slowdown, it said.
In SA, growth would be impacted by load shedding, lower commodity prices and increased import competition in sectors such as steel.
