IMF cuts SA's 2020 growth forecast

Structural constraints and deteriorating public finances are impacting SA's growth prospects negatively, with the International Monetary Fund revising down growth projections for the country.

The IMF on Monday published its world economic outlook for 2020. South Africa's growth has been revised down by 0.3 of a percentage point to 0.8%, compared to projections made in October 2019.

"Structural constraints and deteriorating public finances are holding back business confidence and private investment," the IMF said of SA's performance.

Weak link

South Africa's downward revision pulled down growth expected for the sub-Saharan Africa region, where growth is expected to tick in at 3.5%. This is 0.1 of a percentage point lower than the October projection for the region.

Overall global growth is forecast at 3.3% in 2020, a downward revision of 0.1 of a percentage point. Similarly, growth for 2019 is estimated 0.1 of a percentage point lower at 2.9%. Growth for 2021 is estimated 0.2 of a percentage point lower at 3.4%.

"The downward revision primarily reflects negative surprises to economic activity in a few emerging market economies, notably India, which led to a reassessment of growth prospects over the next two years.

"In a few cases, this reassessment also reflects the impact of increased social unrest," the IMF said.

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