06 Feb 2018
Why the IMF cut South Africa’s growth forecast for 2017
In its October World Economic Outlook, the IMF cut its 2017 growth forecast for South Africa from 1% to just 0.7%. In this podcast, Investec Chief Economist Annabel Bishop explains how rising political uncertainty has dented consumer and business confidence.
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Citing “heightened political uncertainty”, the IMF cut its projections for 2017 economic growth in South Africa from 1% in July to 0.7% in its October report.“Despite more favourable commodity export prices and strong agricultural production,” the IMF expects “subdued growth” in South Africa due to political turmoil sapping consumer and business confidence.
Bucking the trend towards what Investec Chief Economist Annabel Bishop calls “a synchronised global upswing”, the lender said that it forecast a 1.1% growth rate in 2018 for South Africa. In this Investec podcast on the reasons behind the IMF cut, Annabel explains that while there have been “very strong inflows into our debt market” there have been “substantial outflows driven by negative sentiment due to political and economic uncertainty” in the run-up to the elections.
ANC elective conference - a "game-changer"
Calling the ANC elective conference at the end of the year a potential “game-changer”, Annabel says that if the winner is not favoured by the market, there is a “risk that we could see an acceleration in the foreign disinvestment outflow from South Africa”.
Listen to podcast: Investec Chief Economist on the IMF World Economic Outlook
Jump to the topics you're interested in by using the time codes below
00:24: The IMF has upped its forecast for global growth. Why is South Africa an exception?
00:50: The synchronised global upswing
01:40: Weak economic growth trend since 2010 in South Africa
01:47: Growth forecasts for 2017 and 2018
02:30: Will the upswing in global growth help South Africa’s prospects?
04:56: Key milestones that could affect our credit rating
08:20: South African interest rates
If we continue to grow at around 1% instead of around the 5-6% growth rate that we need, we will be at risk of becoming a low income economy.
Listen to more podcasts with Annabel Bishop on Investec Focus
Investec Chief Economist Annabel Bishop provides insights into the South African economy.
About the author
Chief Economist of Investec Ltd
Annabel holds an MCom Cum Laude (Economics and econometrics) and has worked in the macroeconomic, risk, financial market and econometric fields, among others, for around 25 years. Working in the economic field at Investec, Annabel heads up a team, which focusses on the macroeconomic, financial market and global impact on the domestic environment. She authors a wide range of in-house and external articles published both abroad and in South Africa.
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