The World Bank’s ninth South Africa Economic Update – published earlier this week – expects gross domestic product growth to accelerate to 1.1% in 2017 and 1.8% in 2018.
World Bank senior economist, Marek Hanusch, based this projected modest recovery – from an expected 0.4% growth for 2016 – on improving commodity prices, dissipating drought effects, and cautious optimism on improved exports.
“Stronger growth is also expected to be supported by a markedly improved supply of electricity and smoother labour relations,” he said, adding that the report also suggested that encouraging private investment was one area where policy could help to decisively turn around the South African economy and enhance growth.
According to Hanusch, the report argues that re-orientating investment tax incentives to favour agriculture, manufacturing, construction, trade and other services sectors would increase job creation at no additional fiscal cost.
