IMF keeps SA’s 2016 growth forecast unchanged

The financial institution says there will be only a ‘modest recovery’ to 0.8 percent growth in 2017.

Picture: AFP.

CAPE TOWN - The International Monetary Fund (IMF) has kept South Africa's economic growth forecast unchanged for 2016.

The IMF released its world economic report earlier today.

Earlier this year, the institution revised South Africa's economic outlook downward from 0.7 to 0.1 percent, one of the reasons cited for the down-ward revision was domestic politics and policies that appear to harm confidence.

The financial institution says there will be only a "modest recovery" to 0.8 percent growth in 2017, down from its earlier projected expansion to one percent.

The IMF has cited the effects of lower commodity prices, high unemployment and policy uncertainty that are weighing on the economy.

It adds the efficiency and governance of state-owned enterprises need to be improved to lift the country's growth prospects.

The South African Reserve Bank is expecting a growth rate of 1.3 percent next year.

In its monetary policy review, released yesterday, it says that without structural reforms the economy is only expected to grow by between 1 and 2 percent for the foreseeable future, generating little improvement in employment.