load shedding eskom rand

Photo: Pixabay

South Africa’s growth forecast slashed by World Bank

Good news and the South African economy, Two things you very rarely see together. The World Bank isn’t bucking the trend, either.

load shedding eskom rand

Photo: Pixabay

Oh good. Is that more bleak economic news? Thank you, World Bank: Just set it down over there with the recession, the unemployment figures, the credit rating and the nine years Jacob Zuma ran the country.

You get the point. The financial giants have cut South Africa’s growth forecast for the year by 0.4%. Initially pencilled in to increase by 1.4%, that figure has been revised to 1%. Our Gross Domestic Product (GDP) will show only a minimal year-on-year increase, in keeping with the rest of sub-Saharan Africa.

As Fin24 report, the World Bank reduced its forecast for economic growth in the south of the continent, too. It’s not just internal factors that are weighing South Africa down: The external environment has become less favourable, amid mounting global trade risks and weakening demand for the area’s products.

Their June forecast suggested sub-Saharan markets would rise by 3.1% come the end of the year but like South Africa, 0.4% has been shaved off of that prediction, leaving the forecast at 2.7% instead.

Shared in the Africa Pulse report this Wednesday, the publication pointed to rising oil prices and cheaper metal tariffs as the cause of further misery:

“The tightness of oil supply suggests that oil prices are likely to remain elevated through the rest of the year and into 2019. Metals prices have been lower than previously forecast and may remain subdued in 2019 and 2020 amid muted demand, particularly in China.”

It’s not like President Cyril Ramaphosa and his cabinet aren’t throwing the kitchen sink at the flailing economy, however. Thursday sees the beginning of an all-important Jobs Summit, which aims to plough work opportunities back into the market to alleviate the pressure on 9.6 million unemployed South Africans.

Recently, Ramaphosa delivered a stimulus package which aims to kickstart the economy with R400 billion’s worth of investments. He’s also embarked on a foreign investment drive aiming to raise $100 billion for the country, and Home Affairs have relaxed visa restrictions to boost the tourism industry.