adminThis is the lowest growth forecast for SA by a major institution‚ and is much lower than Treasury’s 0.9 percent and the Reserve Bank’s 0.6 percent. JOHANNESBURG — The International Monetary Fund (IMF) has again revised SA’s economic growth forecast for 2016‚ this time to just 0.1 percent from 0.6 percent in April‚ the Fund announced on Thursday.This is the lowest growth forecast for SA by a major institution‚ and is much lower than Treasury’s 0.9 percent and the Reserve Bank’s 0.6 percent.
Downside risks stemmed mainly from SA’s linkages with China‚ heightened global financial volatility‚ and domestic politics and policies that were perceived to harm confidence‚ the IMF Executive Board said in a statement.
At 0.1 percent economic growth, the slowest since the recession seven years ago – per capita incomes would continue to decline and unemployment would likely rise further.
SA’s unemployment is at 26.7 percent.
The Fund sees economic growth at 1.1 percent in 2017 and at around 2 percent to 2.5 percent from 2018 “as shocks dissipate and more power plants are completed”.
Greater competition‚ labour market policies and industrial relations that work for a greater portion of the population‚ better quality of government services especially in education and improved governance and efficiency in state-owned enterprises would all help increase growth‚ according to the IMF.
The Fund commended the country for making progress in supplying power as well as for the recent improved working relations between government‚ business and labour saying “the recent dialogue between social partners could catalyse reform implementation and invigorate growth”. — TMG Digital/BDlive
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