World Bank cuts SA economic growth projections

Growth in South Africa remains problematic with the World Bank lowering its estimates for 2017 to 0.6% and 1.1% growth in 2018.

The bank’s projected estimates for SA are lower than those it put out in January – by 0.5 and 0.7 percentage points for 2017 and 2018 respectively.

The bank cited a “deterioration of investor confidence in South Africa amid two recent sovereign rating downgrades to subinvestment grade” as a reason for its latest projection cut.

It also attributed political uncertainty ahead of key elections at the end of the year. “In South Africa, political uncertainty and low business confidence are weighing on investment,” it said.

In early April, S&P Global Ratings and Fitch downgraded South Africa’s sovereign credit rating to sub-investment status on account of heightened political uncertainty.

The World Bank projects growth to reach 2% in 2019.

StatsSA announced last week that South Africa’s unemployment rate had reached 27.7% in the first quarter of 2017 – the highest rate observed since September 2003.

The expanded unemployment rate – including those who are unemployed and not actively seeking work, also hit a new high of 36.4%.

Read: SA unemployment rate hits worst level in 14 years

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World Bank cuts SA economic growth projections