IMF projects SA’s economy to shrink by 5.8% this year

The South African Reserve Bank announced on Tuesday that a contraction of 6.1% is forecast for South Africa’s GDP this year.

FILE: A man walks past the International Monetary Fund (IMF) headquarters in Washington DC on 5 September, 2018. Picture: AFP

JOHANNESBURG - The International Monetary Fund (IMF) on Tuesday said economic growth in South Africa was set to follow similar trends in sub-Saharan Africa with the region’s gross domestic product expected to contract 1.6% this year.

The South African Reserve Bank (Sarb) announced on Tuesday that a contraction of 6.1% is forecast for South Africa’s GDP this year.

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This came after it announced that the repo rate would drop by 100 basis points to help spur on the economy.

The IMF said the country’s growth is projected to contract 5.8% this year from growth of 0.2% last year.

The leader of the economic intervention workgroup at Business for South Africa, Martin Kingston, said it could be worse. He said a number of factors needed to be taken into account when it came to South Africa’s growth and it was still too early to determine what the final GDP figure would be.

The IMF warned the world could be heading into the worst recession since the Great Depression.

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