Picture: Karen Sandison/African News Agency(ANA)

JOHANNESBURG – The World Bank has projected that South Africa's economic growth will accelerate only modestly to 1.3 percent in 2019, held back by constraints on domestic demand and limited government spending.

The Bank's forecast compares with the 1.7 percent given by Finance Minister Tito Mboweni in October, while the South African Reserve Bank kept its own prediction unchanged at 1.9 percent in November.

In its "2019 Global Economic Prospects" report released late on Tuesday, the World Bank said growth in sub-Saharan Africa was expected to accelerate to 3.4 percent, despite global expansion being expected the decline to 2.9 percent as trade and investment weaken.

The bank said sub-Saharan Africa's growth outlook was predicated on diminished policy uncertainty and improved investment in large economies, together with continued robust growth in non-resource intensive countries. 

Growth in Nigeria is expected to rise to 2.2 percent in 2019, assuming that oil production recovers while a slow improvement in private demand constrains growth in the non-oil industrial sector.

Angola's GDP is forecast to grow 2.9 percent as the oil sector recovers with new oil fields coming on stream and as reforms bolster the business environment.

The bank said emerging and developing economies should rebuild policy buffers and boost productivity to sustain growth. 

But growth among advanced economies is forecast to drop to two percent this year, as slowing external demand, rising borrowing costs, and persistent policy uncertainties are expected to weigh.

World Bank chief executive officer Kristalina Georgieva said the upswing in commodity exporters had stagnated, while activity in commodity importers was decelerating. 

Georgieva said per capita growth would be insufficient to narrow the income gap with advanced economies in most of emerging market and developing economies in 2019.

"At the beginning of 2018 the global economy was firing on all cylinders, but it lost speed during the year and the ride could get even bumpier in the year ahead," she said.

"As economic and financial headwinds intensify for emerging and developing countries, the world’s progress in reducing extreme poverty could be jeopardized. To keep the momentum, countries need to invest in people, foster inclusive growth, and build resilient societies."

African News Agency (ANA)