South Africa's inconsistent electricity supply is expected to cost the country around 0.3 percent of gross domestic product (GDP) growth, ratings agency Standard & Poor's (S&P) said on Monday.
"We would estimate that the electricity drag, the shortages... could take about 0.3 percent off of the rate of growth of the economy this year," said Jean Michel-Six, chief economist for Europe, Middle East, and Africa.
There were some downside risks to this estimate, with S&P recognising that the situation could be worse than in their assessment baseline.
S&P estimated that GDP growth in South Africa for 2015 would be just over two percent.
Michel-Six, speaking to reporters in Johannesburg, suggested this figure would be between 2.2 to 2.5 percent, after the electricity supply effects were considered.
"If Q4 [the fourth quarter] was a pleasant surprise, clearly January's trade deficit was a very unpleasant surprise, where the slowdown in exports was not compensated by lower imports," he said.
"The trade deficit reflected an increase in energy imports, especially diesel, obviously reflecting again that energy situation, and that is weighing on the trade and current account deficits."
For South Africa, S&P was looking at a gradual acceleration in growth for 2016 and beyond, though this would be a "gradual recovery".
Globally, the ratings agency was seeing a shift in the way growth was distributed between developed and emerging markets.
"In the past few years emerging markets were the driving force as far as global growth is concerned, and developed markets were lagging behind," he said.
"We are now seeing some of a re-balancing with a slowdown in emerging markets and some acceleration in certain developed markets, especially the US, which we expect to grow over three percent this year."
He said the "oil shock" played an important role in this. Prices fell around 50 percent between June 2014 and January 2015, providing the equivalent of a "major tax cut" for consumers, as it boosted their purchasing power.
"We would estimate that the positive effect of lower oil prices will add about 0.4 percent to world GDP growth, which is quite significant," he said.
It was projected that oil prices would consolidate at around US60 to US70 a barrel over 2015 and 2016.
The agency was also looking at a slowdown in significant economies, starting with China, which was moving away from an investment-led to a more consumer-led economy.
This had "very important consequences" for South Africa, as it weighed on South African exports, seen through the January trade deficit.
Chinese GDP growth of seven percent was estimated as being the new norm at which the country was likely to grow for the foreseeable future.
A weaker Euro would offer some good news to South African exporters, though Europe was experiencing a gradual economic recovery, with low economic growth.
'Power supply to cost SA GDP growth'
South Africa's inconsistent electricity supply is expected to cost the country around 0.3 percent of gross domestic product (GDP) growth, ratings agency Standard & Poor's (S&P) said on Monday.
"We would estimate that the electricity drag, the shortages... could take about 0.3 percent off of the rate of growth of the economy this year," said Jean Michel-Six, chief economist for Europe, Middle East, and Africa.
There were some downside risks to this estimate, with S&P recognising that the situation could be worse than in their assessment baseline.
S&P estimated that GDP growth in South Africa for 2015 would be just over two percent.
Michel-Six, speaking to reporters in Johannesburg, suggested this figure would be between 2.2 to 2.5 percent, after the electricity supply effects were considered.
"If Q4 [the fourth quarter] was a pleasant surprise, clearly January's trade deficit was a very unpleasant surprise, where the slowdown in exports was not compensated by lower imports," he said.
"The trade deficit reflected an increase in energy imports, especially diesel, obviously reflecting again that energy situation, and that is weighing on the trade and current account deficits."
For South Africa, S&P was looking at a gradual acceleration in growth for 2016 and beyond, though this would be a "gradual recovery".
Globally, the ratings agency was seeing a shift in the way growth was distributed between developed and emerging markets.
"In the past few years emerging markets were the driving force as far as global growth is concerned, and developed markets were lagging behind," he said.
"We are now seeing some of a re-balancing with a slowdown in emerging markets and some acceleration in certain developed markets, especially the US, which we expect to grow over three percent this year."
He said the "oil shock" played an important role in this. Prices fell around 50 percent between June 2014 and January 2015, providing the equivalent of a "major tax cut" for consumers, as it boosted their purchasing power.
"We would estimate that the positive effect of lower oil prices will add about 0.4 percent to world GDP growth, which is quite significant," he said.
It was projected that oil prices would consolidate at around US60 to US70 a barrel over 2015 and 2016.
The agency was also looking at a slowdown in significant economies, starting with China, which was moving away from an investment-led to a more consumer-led economy.
This had "very important consequences" for South Africa, as it weighed on South African exports, seen through the January trade deficit.
Chinese GDP growth of seven percent was estimated as being the new norm at which the country was likely to grow for the foreseeable future.
A weaker Euro would offer some good news to South African exporters, though Europe was experiencing a gradual economic recovery, with low economic growth.
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