IMF predicts upturn for SA economy this year

'Growth will accelerate in 2003' Ed Richardson SOLID GROWTH is predicted for much of the African continent despite the global slow-down. And, according to a report by the International Monetary Fund (IMF), the South African economy is expected to pick up later this year. While prospects vary widely between countries, overall growth in Africa is set to slow modestly to 3.4% this year from 3.7% in 2001 and accelerate to 4.2% in 2003, the IMF said in a its World Economic Outlook. "Recent increases in oil prices are clearly supporting the outlook for Africa's oil producers, but are having a deleterious effect on the many other commodity exporters in the region, which include many of the poorest countries," it said. Positive developments on the continent include a drop in the number of regional conflicts, the New Partnership for Africa's Development, and the fact that more countries are eligible for debt relief. The IMF predicts that South Africa's economy will grow by an annual rate of 2.3% this year Ð a touch faster than 2.2% in 2001 Ð and accelerate further to 3% in 2003 as global growth and commodity prices recover. South Africa's economy accounts for about 40% of gross domestic product in sub-Saharan Africa. The IMF said the reasons for a sharp plunge in the South African rand late in 2001 were unclear, but may be linked to exchange rate weakness in other commodity-based economies as well as turmoil in Zimbabwe and delays in the government's privatisation programme. Confidence in the currency Ð which has stabilised so far this year Ð should be supported in 2002 by the closing of the Reserve Bank's uncovered forward foreign exchange liabilities and interest rate hikes aimed at quashing inflation, it added.