CAPE TOWN - According to the World Bank, South Africa’s economy is expected to grow by just 1.1% in 2018. This is one of the lowest growth rates in sub-Saharan Africa.
This was revealed in the bank’s annual global economic outlook which was published yesterday. The outlook forecasts GDP predictions around the world.
When comparing the 43 countries that sub-Saharan Africa comprise of, only two of these countries fared lower than South Africa. These two countries were Equatorial Guinea and Zimbabwe.
The bank further observed that sub-Saharan Africa’s overall growth would likely average around 3.2% in 2018. A meager 0.1% higher than the world average of 3.1%.
Meanwhile, stronger growth prospects were expected in so-called “non-resource intensive countries’’.
“Côte d’Ivoire is forecast to expand by 7.2% in 2018, Senegal by 6.9%, Ethiopia by 8.2%, Tanzania by 6.8% and Kenya by 5.5% as inflation eases”, says the study.
Meanwhile, major oil exporters, Nigeria and Angola were forecast to grow at 2.5% and 1.6% in 2018.
Although SA’s forecast growth of 1.1 in 2018 would only be a third of the region’s average, it would still be higher than the country’s 0.8% growth in 2018.
The World Bank said that this slight recovery holds promise for SA’s economy in improving its depiction as a country "improving business sentiment supports a modest rise in investment".
Structural reforms could however be slowed down, says the bank as a result of persisting policy uncertainty.
Many African countries would likely be looking to China for trade, says the bank.
“An abrupt slowdown in China could generate adverse spillovers to the region through lower-than-expected commodity prices”, says the report.
Advanced economies and emerging markets however pose a positive growth outlook for 2018.
"Growth in advanced economies is expected to moderate slightly to 2.2% in 2018, as central banks gradually remove their post-crisis accommodation and as an upturn in investment levels off," it said. "Growth in emerging market and developing economies as a whole is projected to strengthen to 4.5% in 2018, as activity in commodity exporters continues to recover”, says the report.
Just last month, FNB senior economic analyst, Jason Muscat, said that SA's GDP performed better than expected and is likely to be on the rise.
“Growth for the three quarter of 2017 is averaging 1%, and given our expectations of a strong showing from retail in the fourth quarter, we are likely to upwardly revise our full-year growth forecast which currently stands at 0.7%,” Muscat said.
Notably, the two sectors which outperformed itself were the manufacturing and agricultural sector.
"The manufacturing sector, which makes up almost 8% of GDP, posted its best performance in five quarters. Growth in the sector was broad-based, with strong rises in the output of petroleum, metal products, and motor vehicles", said Africa economist at Capital Economics, John Ashbourne.
Meanwhile, the agricultural sector recorded its biggest quarterly growth in 21 years, climbed 44.2% in the quarter under review, higher than a 38.7% increase in the second quarter.
The sector makes up 2.5% of total GDP.
- BUSINESS REPORT ONLINE