The International Monetary Fund (IMF) has cut its economic growth forecast for South Africa, warning that logistical challenges are constraining activity and holding back the entire region.
Africa's most industrialized economy is likely to grow by just 1% this year, much slower than the IMF forecast in October, when South Africa's gross domestic product (GDP) expanded by 1.8%, Washington said. The based financial institution made the announcement on Tuesday in the World Magazine Update. economic outlook.
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Pierre-Olivier Grinchat, the IMF's chief economist, said in an interview with Bloomberg TV that the main reason for this was “all the disruptions we've seen in the energy sector and in South Africa's transport, cargo and port logistics.” He said this in a TV interview. Johannesburg.
“That needs to be addressed.”
The country has been handicapped by rolling blackouts and disrupted logistics at ports and railways, reflecting years of poor investment and poor management. The IMF has lowered the country's 2025 forecast to 1.3% from 1.6%.
Grinchas was also cautious about South Africa's fragile fiscal situation and rising public debt levels. Finance Minister Enoch Godongwana will deliver his annual budget speech on 21 February.
financial reconstruction
“We were talking about the need to rebuild South Africa's finances,” he said. “We also need to rein in public spending and increase tax revenue.”
South Africa is due to hold elections this year, posing further challenges to public finances.
Opinion polls show the ruling African National Congress is at risk of losing its majority for the first time since 1994, with some within the party likely to oppose spending cuts even as the Treasury insists on fiscal restraint. Highly sexual.
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The country's lukewarm performance is also holding back the entire region. The IMF's forecast for sub-Saharan Africa's growth this year is 3.8%, a sharp setback.
“The downward revision of 0.2 percentage points to 2024 from October 2023 primarily reflects a weaker outlook for South Africa due to increased logistical constraints,” the financial institution said.
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