JOHANNESBURG - The International Monetary Fund (IMF) has cut South Africa’s economic growth forecast for this year from the previous 1% to 0.7% and singled out “rising political uncertainty” for the cut.
In its latest World Economic Outlook, the IMF said the political uncertainty dented consumer and business confidence in the country.
The IMF said South Africa’s gross domestic product (GDP) growth was expected to remain subdued, despite more favourable commodity export prices and strong agricultural production, as heightened political uncertainty saps consumer and business confidence.
The IMF expected a 1.1% growth for South Africa next year. In February, the National Treasury predicted that the economy would grow by 1.3% this year and 2% in next year.
That was before SA's downgrading to sub-investment grade. Finance Minister Malusi Gigaba is expected to reveal the latest estimates when he delivers his inaugural his Medium-Term Budget Policy Statement on October 25.
The IMF said economic growth in sub-Saharan Africa would soar by 2.6% this year.