The World Bank has cut its estimate for South African GDP expansion to 1% this year from 1.4%, it sees growth in 2019 remaining subdued as high unemployment constrains domestic demand.
Overall for the sub-Saharan Africa region the World Bank reduced its forecast for economic growth as the external environment becomes less favorable amid mounting global trade risks and weakening demand for the area’s products.
Gross domestic product in the region will probably expand by 2.7% in 2018, the Washington-based lender said in an emailed copy of its Africa Pulse report on Wednesday. That’s down from the World Bank’s June forecast of 3.1% contained in the Global Economic Prospects publication.
“The road ahead is bumpy,” it said. “The tightness of oil supply suggests that oil prices are likely to remain elevated through the rest of the year and into 2019. Metals prices have been lower than previously forecast and may remain subdued in 2019 and 2020 amid muted demand, particularly in China.”
Sluggish expansion in Angola, Nigeria and South Africa, the three biggest economies, is weighing on economic activity in the area, it said.
The World Bank cut its forecast for Nigerian growth this year by a 0.2 percentage point to 1.9%.
* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER