Chrisine Lagarde, Managing Director, IMF

27 October 2017

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.

Annabel Bishop

Investec Chief Economist

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”.

0.7%
IMF 2017 growth forecast for South Africa
1.1%
IMF growth forecast for South Africa in 2018

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 

Annabel Bishop
"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."

Annabel Bishop, Investec Chief Economist

Listen to more podcasts with Annabel Bishop

Malusi Gigaba

Disclaimer

The opinions and views expressed are for information purposes only and are subject to change without notice. They should not be viewed as independent research, recommendations or investment advice of any nature.