IMF paints a bleak picture for SA's economic growth

Nedbank economist Busisiwe Radebe says the IMF’s forecast comes as no surprise.

Picture: Christa Eybers/EWN

CAPE TOWN - The International Monetary Fund (IMF) says South Africa's economic growth is expected to slow to 0.1 percent this year.

This is a downward revision of its January forecast of 0.7 percent.

The Fund has cited downside risks stemming mainly from linkages with China, heightened global financial volatility, and domestic politics and policies that appear to harm confidence.

In a statement, the IMF says while South Africa has made "impressive economic and social progress in the past two decades," deep-rooted structural problems, infrastructure bottlenecks and skill mismatches are holding back growth and exacerbating unemployment and inequality

Nedbank economist Busisiwe Radebe says the IMF's forecast comes as no surprise.

"At Nedbank, next year we think we are going to grow at about one percent and the year thereafter at about 1.5 percent. This feels like a bottom, not that one and 1.5 percent is great."

TREASURY OPTIMISTIC OVER SA GROWTH

National Treasury, meanwhile, says it's more positive about South Africa's economic growth than the IMF.

In a statement, Treasury says it's expects growth and employment to be supported by structural reforms and targeted government interventions.

It agrees with the Fund that a package of structural reforms is necessary to drive growth, create jobs and lower inequality.