IMF cuts South Africa’s growth forecast for 2017

The International Monetary Fund (IMF) has cut South Africa’s economic growth forecast for 2017.

The group cited “rising political uncertainty” as the main factor behind the cut, stating that it has dented consumer and business confidence across the country.

The IMF now predicts South Africa’s economy to grow just 0.7% by the end of 2017 – down from original forecasts of 1.0%.

Growth is projected to remain subdued despite more favourable commodity export prices and strong agricultural production, as heightened political uncertainty saps consumer and business confidence,” the global lender said.

South African growth should rise up to 1.1% next year, slightly lower than an earlier forecast of 1.2%, the IMF said in its October world economic outlook.

Treasury had previously indicated that it expects the economy to grow by 1.3% in 2017, but this is likely to be revised when finance minister Malusi Gigaba gives his mid-term budget speech on 25 October.

The rand staged a slight recovery on Tuesday, after facing steady losses against the dollar for the better part of a week. By 15h00, the rand was trading at R13.65 to the dollar – slightly stronger than R13.86 vs the dollar on Monday.

Read: SARS collects over R1 billion in tax from assets held offshore

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IMF cuts South Africa’s growth forecast for 2017