Johannesburg – The World Bank said on Tuesday, in its
January 2017 Global Economic Prospects report, that global economic growth was
forecast to accelerate moderately to 2.7 percent.
Sub-Saharan African growth was expected to pick up
modestly to 2.9 percent this year as the region continued to adjust to lower
commodity prices, according to the report.
The SA Reserve Bank and National Treasury predicted
growth of just more than 1 percent for South Africa this year.
President Jacob Zuma’s forecast of a 2.9 percent economic
growth rate for this year at the ANC’s 105th birthday celebrations on Sunday
has been rubbished by economists. Nigeria is forecast by the World Bank to
rebound from recession and grow at a 1 percent rate, while Angola is projected
at 1.2 percent.
Growth in advanced economies is expected to edge up to
1.8 percent this year. Fiscal stimulus in major economies “particularly in the
US” could generate faster domestic and global growth than projected, although
rising trade protection could have adverse effects, said the report.
Growth in emerging market and developing economies should
pick up to 4.2 percent this year from 3.4 percent in the year just ended amid
modestly rising commodity prices, it noted.
Nevertheless, said the World Bank, the outlook was
clouded by uncertainty about policy direction in major economies. A protracted
period of uncertainty could prolong the slow growth in investment that was
holding back low-, middle-, and high-income countries.
Local outlook
Momentum Investments said this week that growth in South
Africa’s economy was set to improve this year, with agricultural output
expected to recover, thanks to higher rainfall, while exports were likely to
piggyback off slightly better global economic activity and a modest revival in
commodity prices.
Momentum’s economists, Herman van Papendorp and Sanisha
Packirisamy, said growth, however, was likely to remain sluggish as political
uncertainty ahead of the ANC’s elective conference in December deterred fixed
investment and purchases of big-ticket consumer goods
“Restocking in response to higher growth expectations
could lift growth to above 1 percent in 2017.”
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They said, though lower food inflation and a probable
shift to looser monetary policy in the second half should provide some relief
to consumers, households remained exposed to a bleak jobs outlook, high levels
of indebtedness and the potential for higher taxes.
“Based on our forecasts for headline inflation to drop
more meaningfully on a two-year outlook, we expect further interest rate cuts
in 2018 to benefit consumption spend.”
Momentum said, although South Africa scored higher on the
World Bank governance indicator, the ratings agencies warned that rising
perceptions of political interference in key spheres of government institutions
threatened the country’s macroeconomic performance, public finances and
consequently the ratings outlook.