The International Monetary Fund (IMF) has lowered its forecast for South Africa’s economic growth to 1.2 per cent in 2019 and to 1.5 per cent in 2020.
The IMF, in its World Economic Outlook before its spring meetings in Washington this month, said its forecast was due to the country’s political and policy uncertainty, which had remained a constraint on activity.
The 1.2 per cent expansion projected by the IMF is down from its October forecast of 1.4 per cent. The economy grew 0.8 per cent in 2018.
South Africa has seen growth stagnate in the decade since the world’s financial crisis, with policy missteps under former President Jacob Zuma.
In February, the National Treasury said gross domestic product would grow 1.5 per cent in 2019.
The IMF said, “Structural bottlenecks would continue to weigh on investment and productivity, while subdued metal export prices were also a risk”.
The IMF is referring to the country’s longstanding lack of skilled labour and competition in key industries.
President Cyril Ramaphosa has pledged to re-ignite growth by attracting 1.2 trillion rand ($86 billion) of investments in the next five years and improving the ease of doing business in the country.He faces an uphill battle with nationwide electricity blackouts last month, which is expected to dim business and consumer confidence before national elections on May 8.