The International Monetary Fund cut South Africa’s economic growth forecast for the next two years on Monday, citing rising political uncertainty that has dented investor confidence.
The IMF said in its World Economic Outlook that more subdued growth prospects were projected in South Africa, “where growth is now expected to remain below 1 percent in 2018–19, as increased political uncertainty weighs on confidence and investment.”
The fund said it expected South Africa’s economy to grow by 0.9 percent this year, down from an earlier projection of 1.1 percent given in October. Economic growth was seen at 0.9 percent in 2019 from 1.6 percent earlier.
Corruption allegations under the leadership of President Jacob Zuma have hurt investor confidence in South Africa, with economic growth slowing to a near-standstill in recent years.
But markets have rallied since Deputy President Cyril Ramaphosa’s election as the ruling African National Congress (ANC) leader in December, as investors have warmed to his promises to root out corruption and kick-start economic growth.
Ramaphosa is likely to become South Africa’s next president after elections in 2019, because of the ANC’s electoral dominance.
Reporting by Olivia Kumwenda-Mtambo; Editing by Toby Chopra