Last updated on September 11th, 2021 at 03:24 pm
South Africa’s economic growth is unlikely to reach the treasury’s target of 1.5% in 2019 because conditions have changed and the country is facing increasing headwinds, Finance Minister Tito Mboweni said on Friday.
This week ratings agency Moody’s, the last of the top three credit firms to rate South Africa’s debt at investment level, said it had lowered its growth forecast to 0.7% from 1%.
The central bank sees gross domestic product at 0.6% this year.
“ The assumptions underlying the forecasts have clearly changed … the actual deficit now is probably much higher. ”
Both have cited slow economic reforms as the key drag on economic activity, and massive bailouts to state-owned companies, including 59 billion rand ($4.05 billion) to power firm Eskom.
This has limited the government’s scope for stimulus and raised debt while the resultant uncertainty has kept investment subdued.
“The assumptions underlying the forecasts have clearly changed … the actual deficit now is probably much higher,” Mboweni told a banking conference in Johannesburg.
He said that increasing calls for the treasury to bail out state firms was putting pressure on growth and spending.
“We must re-focus our economy on agriculture …but we also have to continue to support Eskom, because without electricity there is no growth,” Mboweni said.
A Reuters poll of economists this week forecast South African economic growth at 0.7% this year, up from 0.6% in the previous forecast. Second quarter growth bounced back 3.1% after a revised contraction of 3.1% in the first quarter.
REUTERS
Writing to The Economist, Her Excellency Lana Nusseibeh, Assistant Minister for Political Affairs at the UAE Ministry of Foreign Affairs,…
On Thursday, the initial lot of 100,000 mpox vaccine doses arrived in the Congo capital of Kinshasa, just three weeks…
Having given approximately AED360 billion ($98.09 billion) in overseas aid since its inception in 1971 till mid-2024, the United Arab…
South Africa's former president Jacob Zuma's 21-year-old daughter is marrying the King of Eswatini for love, a spokesman for Africa's…
At the 9th Forum on China-Africa Cooperation (FOCAC) in Beijing, Chinese President Xi Jinping announced an ambitious strategy to lift…
In yet another sad event involving migrants trying to reach Europe, on Tuesday a boat carrying thirty-two migrants overturned off…
This website uses cookies.