Cape Town – South Africa’s economy is expected to grow by just 1.1% in 2018 – one of the lowest rates in sub-Saharan Africa, according to the World Bank.
The bank published its annual global economic outlook on Tuesday evening, which includes predictions of GDP growth around the globe.
Of the 43 countries that make up sub-Saharan Africa only two – Equatorial Guinea and Zimbabwe, were forecast to have lower growth rates than South African in 2018.
The World Bank said that sub-Saharan Africa’s growth would likely average around 3.2% in 2018, about 0.1% higher than the world average of 3.1%.
Growth was expected to be particularly strong in what the bank calls “non-resource intensive countries”.
“Côte d’Ivoire is forecast to expand by 7.2% in 2018, Senegal by 6.9%, Ethiopia by 8.2%, Tanzania by 6.8% and Kenya by 5.5% as inflation eases,” stated the study’s authors.
Major oil exporters Nigeria and Angola, meanwhile, were forecast to grow at 2.5% and 1.6% respectively in 2018.
Still higher than 2017
While SA’s forecast growth of 1.1% in 2018 would be only a third of the region’s average, it would still be higher than the country’s growth in 2017, which averaged only 0.8%.
The bank said this mini recovery was expected to solidify in 2018, as “improving business sentiment supports a modest rise in investment”.
However, it added that SA policy uncertainty was likely to remain, and could slow needed structural reforms.
The bank noted that in 2018 many African countries would again be looking to China to continue buying their resources, which posed a risk. “An abrupt slowdown in China could generate adverse spillovers to the region through lower-than-expected commodity prices,” it said.
The bank forecast that the global economy would expand by about 3.1% in 2018, with faster growth among emerging markets than developed ones.
“Growth in advanced economies is expected to moderate slightly to 2.2% in 2018, as central banks gradually remove their post-crisis accommodation and as an upturn in investment levels off,” it said. “Growth in emerging market and developing economies as a whole is projected to strengthen to 4.5% in 2018, as activity in commodity exporters continues to recover.”
Commodity-exporting developing economies, a designation that includes South Africa, should be able to benefit from firming commodity prices, it said.
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