The International Monetary Fund cut South Africa’s 2016 growth forecast to barely above 0 percent on Thursday, saying that Africa’s most industrialised economy was not keeping up with the increasing population.
The economy would grow by 0.1 percent in 2016 versus a previous estimate of 0.6 percent given by the global lender in May, IMF mission chief for South Africa, Laura Papi, and senior economist with its African department, Yi Wu, said in a column in the Business Day newspaper.
Growth is seen expanding by 1.1 percent in 2017, the officials said.
“The outlook is sobering… This means the economy is not keeping up with the rate of population growth, which is 1.7 percent,” they said.
South Africa’s economy is struggling to grow, hobbled by low commodity prices linked to a slowdown in key consumer China as well as a severe drought in the region which has pushed food prices and inflation higher.
Investors are also uncertain about Pretoria’s commitment to sound economic policy as it deals with political ructions triggered by President Jacob Zuma inexplicably changing finance ministers twice in four days in December.
(Reporting by Olivia Kumwenda-Mtambo; Editing by James Macharia)