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BL Premium reports that the IMF has revised downwards SA’s economic growth projections for the year and expects GDP expansion to be almost a percentage point lower than the Reserve Bank’s most recent forecasts.
This comes as emerging markets lag behind a potential recovery due to hits to tourism and some commodity markets. The lender of last resort said in its World Economic Outlook report released on Tuesday that SA’s economy would grow 2.8% in 2021, a slight downgrade on its 3% projection in October. The economy was estimated to have declined 7.5% in 2020, the organisation said. It added that growth would slow in 2022, to just 1.4%. Domestically, economists are braced for more weakness after a surge in Covid-19 infections led to the government tightening lockdown restrictions, thereby dealing a huge blow to tourism and hospitality businesses after the closure of some beaches and the prohibition of alcohol sales. The tourism sector in SA contributes 7% to GDP and before the Covid-19 outbreak was responsible for 1.5-million jobs, or 9.2% of total employment. Stanlib chief economist Kevin Lings noted that the IMF’s forecast of 2.8% for SA in 2021 was well below the private sector consensus forecast of 3.5% and the Reserve Bank’s estimate of 3.6%.
- Read the full original of the report in the above regard by Bekezela Phakathi at BusinessLive (paywall access only)
Get other news reports at the SA Labour News home page