IMF sees growth at less than 1% for SA

The International Monetary Fund (IMF) has slashed SA’s economic growth forecast to less than 1% this year‚ making it one of the more pessimistic.

As the economy would grow at its slowest pace since the recession seven years ago‚ investments would be crippled and joblessness would persist‚ the IMF said on Tuesday in its World Economic Outlook update.

In October it had projected growth of 1.3%.

South Africans would be worse off this year than they were last year‚ IMF senior representative in SA Axel Schimmelpfennig said.

The average gross domestic product (GDP) per South African was shrinking given that population growth was above that of the economy‚ Mr Schimmelpfennig said.

He said this meant that it would be “more difficult to find jobs‚ and some may be faced with lay-offs. Investment may also be subdued.”

The outlook for next year was lowered to 1.8% from 2.1%.

Declining commodity prices‚ weakening business and consumer confidence‚ anticipated interest rate hikes‚ the drought‚ policy uncertainty and electricity bottlenecks had contributed to the growth revision‚ Mr Schimmelpfennig said.