South Africa’s economy is forecast to tick up to 1.1% in 2018 from 0.8% in 2017, according to new data published by the World Bank.
“The recovery is expected to solidify, as improving business sentiment supports a modest rise in investment. However, policy uncertainty is likely to remain and could slow needed structural reforms,” the bank said in its annual global economic outlook for 2018.
South Africa’s gross domestic product (GDP) rose by 2% in the third quarter of 2017, following an increase of 2.8% in the second quarter, StatsSA said in early December.
The World Bank said that the country’s GDP is expected to grow 1.7% in both 2019 and 2010.
Market sentiment has improved since the appointment of Cyril Rhamaphosa as leader of the ruling political party, the African National Congress, and amid speculation that Jacob Zuma will step down as president of the country, sooner rather than later.
The rand has gained around 8% as investors bet Ramaphosa would push through business-friendly policies.
Parliament said it would meet this week to review its rules relating to removing the country’s president, after the constitutional court said on Dec. 29 lawmakers had previously failed to hold Zuma to account, further fuelling rumours of an early exit for the 75-year-old leader.
The ANC’s top brass are also due to meet this week, with Zuma’s recall expected to be on the agenda.
Growth in Sub-Saharan Africa is estimated to have rebounded to 2.4% in 2017, after slowing sharply to 1.3% in 2016. The rise reflects a modest recovery in Angola, Nigeria, and South Africa – the region’s largest economies – supported by an improvement in commodity prices, favorable global financing conditions, and slowing inflation that helped to lift household demand.
“However, growth was slightly weaker than expected, as the region is still experiencing negative per capita income growth, weak investment, and a decline in productivity growth,” the report said.
The World Bank said that sub-Saharan Africa growth in the region is anticipated to pick up to 3.2% in 2018 from 2.4% in 2017. “Stronger growth will depend on a firming of commodity prices and implementation of reforms. A drop in commodity prices, steeper-than-anticipated global interest rate increases, and inadequate efforts to ameliorate debt dynamics could set back economic growth,” it said.
Nigeria is anticipated to accelerate to a 2.5% expansion this year from 1% in the year just ended.
The World Bank forecasts global economic growth to edge up to 3.1% in 2018 after a much stronger-than-expected 2017, as the recovery in investment, manufacturing, and trade continues. “Growth in advanced economies is expected to moderate slightly to 2.2% in 2018, as central banks gradually remove their post-crisis accommodation and the upturn in investment growth stabilizes.
“Growth in emerging market and developing economies as a whole is projected to strengthen to 4.5% in 2018, as activity in commodity exporters continues to recover amid firming prices,” it said.