JOHANNESBURG – Global lender, the International Monetary Fund (IMF) on Tuesday slashed South Africa’s projected gross domestic product (GDP) growth rate for 2019 to 1,2 percent from a previous forecast of 1,4 percent, citing policy uncertainties in after national elections set for next month.
The new figure released in the IMF’s latest edition of the ‘World Economic Outlook’ placed Africa’s most industrialised economy among the worst economic performers in sub-Saharan Africa.
It said South African GDP growth for 2020 would also be lower than previously projected at 1,5 percent, from 1,7 percent.
“The projected recovery reflects modestly reduced but continued policy uncertainty in the South African economy after the May 2019 elections,” the IMF noted.
The IMF forecast real GDP growth in sub-Saharan Africa to end the year 2019 at 3,4 percent.
This means the South African economy’s growth rate this year will expand at a pace that is less than half the average regional growth rate.
Among the African economies listed in the report, oil rich Angola, which has been recovering from a recession, is expected to average lower GDP growth than South Africa in 2019.
The Fund projected that South Africa’s growth would stabilise at around 1,75 percent, as “structural bottlenecks continue to weigh on investment and productivity, and metal export prices are expected to remain subdued”.
Tuesday’s report places the IMF’s growth projections below what South Africa’s central bank has forecast.
Last month, the South African Reserve Bank governor, Lesetja Kganyago, said the central bank projected that GDP growth for 2019 would average 1,3 percent, which is also below the bank’s January projection of 1,7 percent.
The bank’s forecast for 2020 was 1,8 percent, down from two percent.
At a growth rate of 1,2 percent, South Africa’s economic expansion would still be above the 0,8 percent growth rate for last year.
A 1, 2percent GDP growth rate for 2019 is far below the five percent growth required in terms of the National Development Plan to reduce poverty and inequality by 2030.