IMF cuts forecast for South African growth

play article
Subscribers can listen to this article
Getty Images

The International Monetary Fund has lowered its forecast for economic growth in South Africa this year.

It now expects growth of 1.9% in 2022, a downgrade from its previous forecast of 2.2%.

"South Africa’s growth forecast is downgraded in light of a softer-than-expected second half in 2021 and a weaker outlook for investment as business sentiment remains subdued," the IMF said in a statement.

Its growth forecast for 2022 is still above that of the SA Reserve Bank, which expects growth of only 1.7% this year.

But the IMF expects even weaker growth in 2023, of 1.4%.

For the whole of 2021, the IMF expects that the local economy would have grown by 4.6%. Data for the final quarter has not yet been released.

The IMF also lowered its forecast for global growth to 4.4% in 2022 - half a percentage point weaker than its previous forecast - from an estimated 5.9% in 2021. 

"The global economy enters 2022 in a weaker position than previously expected," it said.

This is due to new restrictions and lockdowns amid the Omicron Covid-19 variant, as well as higher energy prices and supply disruptions. This has pushed inflation higher than expected in the US and elsewhere. 

"The ongoing retrenchment of China’s real estate sector and slower-than-expected recovery of private consumption also have limited growth prospects."

Global growth is expected to slow to 3.8% in 2023. 

"Risks to the global baseline are tilted to the downside," said the IMF. "The emergence of new Covid-19 variants could prolong the pandemic and induce renewed economic disruptions. Moreover, supply chain disruptions, energy price volatility, and localised wage pressures mean uncertainty around inflation and policy paths is high."

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For 14 free days, you can have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today. Thereafter you will be billed R75 per month. You can cancel anytime and if you cancel within 14 days you won't be billed. 
Subscribe to News24
Rand - Dollar
Rand - Pound
Rand - Euro
Rand - Aus dollar
Rand - Yen
Brent Crude
Top 40
All Share
Resource 10
Industrial 25
Financial 15
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot