South Africa’s real GDP growth will expand by a paltry 1.3% in 2019, according to a World Bank projection, putting it among the worst performers in sub-Saharan Africa.
The bank, which published its annual Global Economic Prospects on Tuesday evening, downgraded the country's projected 2019 growth rate from its June 2018 estimate of 1.8%.
At 1.3%, SA’s projected real economic expansion will come in at under a third of the estimated 4.2% growth rate of its emerging market peers. It is also well below the projected sub-Saharan average of 3.7%.
The bank said that despite SA officially exiting a recession in the second half of 2018, growth in 2019 would remain subdued due to a combination of challenges in mining production, low business confidence and policy uncertainty.
“High unemployment and slow growth in household credit extension are expected to constrain domestic demand in 2019, while fiscal consolidation limits government spending,” said the bank.
It expects GDP to increase by 1.7% in 2020 and 1.8% in 2021
“Higher growth in 2020 reflects the expectation that the government’s structural reform agenda will gradually gather speed, helping to boost investment growth, as policy uncertainty recedes and investor sentiment improves.”
Region's largest economies
The bank said that Angola and Nigeria - which make up the region's largest economies together with SA - would also face relatively weak growth in 2019, with a projection of 2.9% for Angola and 2.2% for Nigeria.
This has dragged down the region's average growth to 3.7%. Among other African countries, growth would generally be "solid".
“Among non-resource-intensive countries, economic activity is expected to remain robust in fast-growing countries, such as Cote d’Ivoire, Kenya, and Tanzania, boosted by public investment and strong agricultural production, and in smaller economies, such as Madagascar, on the back of solid export performance.
“While growth in Ethiopia is expected to remain strong, it will be weighed down by fiscal consolidation efforts to stabilise public debt.”
The bank expects global growth of 2.9% in 2019.