A down growth has been projected by the IMF (International Monetary Fund) for South Africa. The IMF on South Africa’s performance pointed out structural constraints and deteriorating public finances as one of the biggest factors affecting the growth of the county.
“Structural constraints and deteriorating public finances are holding back business confidence and private investment” – said IMF on the released World Economic Outlook statement for January 2020.
The SA’s projected GDP by IMF was 1.1% in October’s WEO (World Economic Outlook) projections, however, on the WEO published by IMF on Monday revised SA’s growth down by 0.3% bringing the economic forecast down to 0.8%. However, the IMF indicated that global growth is projected to rise from 2.9% projected in 2019 to 3.3% in 2020 and 3.4 for 2021. “A downward revision of 0.1 percentage point for 2019 and 2020 and 0.2 for 2021 compared to those in the October World Economic Outlook (WEO)”
“In the third quarter of 2019, growth across emerging market economies (including India, Mexico, and South Africa) was weaker than expected at the time of the October WEO, largely due to country-specific shocks weighing on domestic demand.
Even though the projected prospects are negatively impacted in South Africa, growth is still expected to strengthen to 3.5 % (from 3.3% in 2019) in sub-Saharan Africa for 2020-21. IMF indicated that the global growth trajectory sees a sharp decrease especially for underperforming and stressed emerging markets and developing economies and this includes Brazil, India, Mexico, Russia, and Turkey.
Due to downward revisions by the IMF for the US, euro area and the UK, and downgrades in Asia (Hong Kong), growth is projected to stabilize at 1.6 in 2020-21.
“In the United States, growth is expected to moderate from 2.3 percent in 2019 to 2 percent in 2020 and decline further to 1.7 percent in 2021 (0.1 percentage point lower for 2020 compared to the October WEO).
“Growth in the euro area is projected to pick up from 1.2 percent in 2019 to 1.3 percent in 2020 (a downward revision of 0.1 percentage point) and 1.4 percent in 2021
“Growth in the euro area is projected to pick up from 1.2 percent in 2019 to 1.3 percent in 2020 (a downward revision of 0.1 percentage point) and 1.4 percent in 2021
“Japan’s growth rate is projected to moderate from an estimated 1 percent in 2019 to 0.7 percent in 2020 (0.1 and 0.2 percentage point higher than in the October WEO)” IMF said on a WEO statement released on Monday.
| About the IMF (International Monetary Fund)
IMF was established in 1944 and created in 1945, and it’s able to lend up to US$1 trillion to its member countries of the organization. The IMF is an organization of 189 member countries globally that ensures the stability of the international monetary system (This is exchange rates and international payments systems that enable countries and their citizens to be able to transact with each other). It promotes high employment and sustainable economic growth and ensures that poverty is reduced across the world. IMF offers a 0% interest rate on loans to underperforming countries. IMF keeps track of the global economy and the economies of member countries and gives practical help and lend money to countries facing difficulties. |
