South Africa’s growth predictions for 2022 have been lowered by the International Monetary Fund (IMF) due to a poorer-than-expected second half in 2021 and a weaker outlook for investment, as business optimism remains low.
The global monetary body said in its global outlook report released on Tuesday (26 January) that it now expects South Africa’s GDP to rise by 1.9 per cent in 2022. This is down from the 2.2 per cent anticipated in October.
According to the IMF, growth will decrease even more in 2023, to 1.4 per cent. On a more upbeat note, the group projects that South Africa’s GDP increased by 4.6 per cent in 2020, recouping losses from the Covid-19 outbreak and lockdown.
The economy contracted in the third quarter of 2021 as a result of the combined constraints of tighter Covid-19 lockout limits and a wave of public unrest in July, according to Statistics South Africa.
After four quarters of positive growth, real gross domestic product (GDP) fell by 1.5 per cent in the second quarter of 2020, undermining some of the country’s economic gains since the devastating impact of Covid-19 in the second quarter. Statistics On March 8, 2022, South Africa is set to release its fourth-quarter and full-year GDP figures.
The slower growth is in line with other nation revisions, indicating that the global economy would begin 2022 in a weaker position than previously anticipated.
“As the new Omicron Covid-19 variant spreads, countries have reimposed mobility restrictions. Rising energy prices and supply disruptions have resulted in higher and more broad-based inflation than anticipated, notably in the United States and many emerging markets and developing economies,” the IMF said.
“The ongoing retrenchment of China’s real estate sector and slower-than-expected recovery of private consumption also have limited growth prospects.”
The IMF said global growth is expected to moderate from 5.9% in 2021 to 4.4% in 2022—half a percentage point lower for 2022 than in the October World Economic Outlook (WEO), largely reflecting forecast markdowns in the two largest economies.
