Johannesbug - The International Monetary Fund (IMF) predicted slow growth for the South African economy this year, after the country slipped into a technical recession. Perceived political instability in the country also did not contribute to the fund's economists believing that South Africa could drag itself out of its current predicament.
The Washington-based institution published its updated World Economic Outlook on Sunday and its take on South Africa and Africa as region remained grim. The report measures' countries' economic growth forecasts, as predicted by IMF economists.
South Africa's difficult outlook has persisted with elevated political uncertainty and weak consumer and business confidence, and the country’s growth forecast was consequently marked down for 2018, the IMF stated.
The IMF predicted modest growth for South Africa of 1 to 1.2% over the next year.
Sub-Saharan Africa as a whole also remained challenging, the fund said. Growth is projected to rise in 2017 and 2018, but will barely return to positive territory in per capita terms this year for the region as a whole—and would remain negative for about a third of the countries in the region.
"The slight upward revision to 2017 growth relative to the April 2017 WEO forecast reflects a modest upgrading of growth prospects for South Africa," the IMF stated.
The silver lining for South Africa here is its bumper crop, due to better rainfall and an increase in mining output prompted by a moderate rebound in commodity prices.
"However, the outlook for South Africa remains difficult, with elevated political uncertainty and weak consumer and business confidence, and the country’s growth forecast was consequently marked down for 2018," it stated.
China, Europe and Japan was the economies driving growth in the world economy. The IMF maintained its world economic growth forecast at 3.5% this year and 3.6% next year, with upward revisions for Japan, China and other Asian emerging markets.
This partly offset the slow US economy, which the IMF also rated with a downward projection. The UK's growth forecast was also cut, after a weak performance in the first three months of 2017.
China 2017 growth projection, however, was revised up 0.1 point to 6.7%.
The growth forecast for the United States was down by 0.2 point to 2.1% this year and by 0.4 point to 2.1% next year. The IMF cited "uncertainty about the timing and nature of US fiscal policy changes," in reference to growing doubts about President Donald Trump's ability to follow through on plans to stimulate the US economy into better growth.
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