S.Africa could see gloomy economic outlook - CNBC Africa

S.Africa could see gloomy economic outlook

Southern Africa

by Trust Matsilele 0

South African is showing signs of a gloomy economic future. PHOTO: Getty Images

Odendaal added that, on the global outlook, the American economy was still growing, Europe was exiting recession, and the Japanese economy was at an experimental phase.

Odendaal posited that it was interesting that the South African governor, Gill Marcus said the challenges facing the economy were self-inflicted leaving no room to keep blaming external players.

(READ MORE: South Africa faces challenge of curbing inflation: Marcus)

The labour relations environment was one reason why the South Africa Reserve Bank had downgraded growth prospects for the economy.  

“The strikes are very concerning and the spill over from one industry to another is also concerning. It’s encouraging to see that the government is now involved in trying to get the parties to start negotiating,” he said.

However, South Africa’s weakening is not in isolation especially those countries directly depending on the southern African country.

(READ MORE: S.Africa's economy facing ënormous headwinds"- Marcus)

“Growth in Sub-Saharan Africa is expected to remain flat at around 4.7 per cent in 2014 mainly due to weakness in South Africa and oil-infrastructure bottlenecks in Angola, two of the region’s largest economies,” read The World Bank projected outlook report.


Commenting on the global matrix, the report noted that the global economy got off to a bumpy start this year buffeted by poor weather in the United States, financial market turbulence and the conflict in the Ukraine.

The World Bank’s global growth projections for 2014 as a whole have been marked down from 3.2 per cent in January to 2.8 per cent.

However, despite the early weakness, growth is expected to pick up speed as the year progresses and world.

The world’s GDP is projected to expand by 3.4 per cent in 2015 and 3.5 per cent in 2016 – broadly in line with earlier forecasts.

On sub-Saharan Africa, the Bank noted that the risks to the region’s outlook were significant and stem from both external and domestic factors. 

“External factors include lower commodity prices brought on by weaker growth in emerging markets, and increased market volatility accompanying the tightening of global monetary conditions. Political instability, conflicts, and inflation are among the major domestic risks.”