World Bank Cuts South Africa’s 2017 Growth Forecast

The World Bank on Tuesday cut its 2017 growth forecast for South Africa after the economy fell into recession earlier this year.

It said in a report that 2017 growth would probably be 0.6 per cent, down from an earlier estimate of 1.1 per cent.

Growth is seen ticking up to 1.1 per cent next year and reaching 1.7 per cent in 2019.

But the bank warned any prospect of recovery would “remain fragile” unless South Africa succeeds in becoming more productive.

“South Africa is not benefiting from the global economic rebound.

“South Africa is well placed in exports markets, but we don’t see the country’s exports breaking into new markets,” World Bank southern Africa specialist Sebastian Deussus said.

President Jacob Zuma last month said South Africa’s 2017 growth would be below 0.5 per cent, down from a forecast of 1.3 per cent in February, after the economy fell into recession in the first quarter.

South Africa emerged from the recession in the second quarter as a recovery in agriculture helped the economy expand.

But since South Africa emerged from its 2009 recession, growth has fallen short of the government’s target of five per cent, the level economists say is needed to curb unemployment.

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