South Africa-Economy-Growth

S/Africa’s GDP to grow to 1%, inflation to 6% - IMF

APA-Pretoria (South Africa)

The International Monetary Fund (IMF) has raised South Africa’s growth forecast to one percent this year, the worldwide finance agency has said.

Speaking on Thursday at the end of an IMF economic team visit to South Africa led by Paolo Mauro, the agency said there were signs of a modest improvement in the South African economy.

“Following last year’s near-stagnation, there are signs that a modest improvement in the pace of economic growth is underway. The rate of real gross domestic product (GDP) growth is projected at one percent in 2017,” Mauro said.

The main factors underlying the pickup in economic activity this year were the resumption of solid agricultural production as the drought abated, and an increase in the mining output prompted by a moderate rebound in the prices of South Africa’s commodity exports.

“The pace of recovery this year and the next is unlikely to prevent a further increase in unemployment and a continued decline in per capita incomes,” he said, adding that the IMF had previously projected growth of 0.8 percent.

In the national budget tabled in February this year, the National Treasury said South Africans could expect growth of 1.3 percent in 2017, which was expected to improve moderately to over 2.0 percent in the medium term.

The IMF team, which was in South Africa from 3 - 16 May 2017, said the agency expected headline inflation to return to below 6.0 percent in the second half of 2017 and in 2018.

NM/jn/APA

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