South Africa (Xinhua) -- The South
African Reserve Bank has said that the country’s gross domestic
product (GDP) growth could dwindle by 1.1 percentage points, if
rolling power outages experienced in March persist throughout
The bank released its Monetary Policy Review on Wednesday
night saying "Load shedding is a risk to 2019 growth and if it
continues all year, growth is likely to be lower by 1.1
percentage points, which would be worst performance since 2009."
Indebted state owned power utility Eskom implemented stage 4
load shedding last month for over two weeks as it struggled to
keep the lights on due to boiler tube leaks and reduced water
levels in Eskom’s hydro.
The Bank said that over 125,000 jobs could also be lost if
the problem is not solved.
The Reserve Bank had earlier projected that the economic
growth could grow at 1.5 percent for this year, but it has since
revised this forecast to 1.3 percent.
Economists estimate that the country loses 2 billion rands
(about 142 million U.S. dollars) every day as a result of load
Fund lowers growth forecast for South Africa
JOHANNESBURG South Africa (Xinhua)
-- The International Monetary Fund
(IMF) on Tuesday lowered its forcast for South Africa’s economic
growth in 2019, from 1.4 percent to 1.2 percent, citing policy
and political uncertainty.
In its world economic outlook, the IMF said South Africa
should prioritize eliminating wasteful expenditure on
state-owned enterprises and reduce public wage bill.
"The projected recovery reflects modestly reduced but
continued policy uncertainty in the South African economy after
the May 2019 elections," the IMF said. "Structural reforms,
particularly to product and labor markets, would foster an
environment conducive to expanding private investment, job
creation, and productivity growth."
It said structural bottlenecks will continue to weigh on
investment and productivity, and that metal export prices are
expected to remain subdued.
The IMF also called on South Africa to exercise fiscal
consolidation to stabilize government debt.
It also cut its forecast for South Africa’s economic growth
in 2020, from 1.7 percent to 1.5 percent.
In February, the South African Reserve Bank lowered its 2019
gross domestic product growth forecast, from 1.7 percent to 1.3
The central bank’s forecasts for the country’s 2020 and 2021
GDP growth are 1.8 percent and 2 percent respectively.
Moody’s warns South Africa
about rising debt and poor economic growth
JOHANNESBURG South Africa (Xinhua)
-- Rating agency Moody’s has warned
that persistent low economic growth and stubborn unemployment
are among key economic problems in South Africa.
Moody’s annual report released on Tuesday said the government
should also deal with its debt as debt is projected to increase
The report stated that the state’s debt was likely to reach
65 percent of the gross domestic product by fiscal year 2023
under the baseline scenario.
It warned that the continued bailouts of state-owned entities
would burden the government’s credit profile.
"The credit profile would face downward pressure if Moody’s
expects that government’s debt and contingent liabilities risk
from SOEs will continue to rise to levels no longer consistent
with a Baa3," the report said.
Early this month, the agency decided to keep the country’s
sovereign rating unchanged at Baa3 with a stable outlook.
Jannie Rossouw, head of business school and science at Wits
University told Xinhua that "Moody’s warnings to the government
Rossouw said the government should reduce its expenditure in
order to tackle its debt.
"They can’t continue spending the way they have been spending
over the past ten years.
"They must give smaller salary increases and stimulate
economic growth as that will boost revenue collection," he
With the general election due to take place in May, Moody’s
said it was expecting these challenges to be properly dealt with
by the government.
Moody’s is projecting that the economic growth would be at
1.3 percent in 2019, after registering a 0.8 percent growth last
South Africa warns against
growth of nationalist
and isolationist tendencies in Western countries
CAPE TOWN South Africa (Xinhua) --
South Africa on Wednesday warned against a growth of nationalist
and isolationist tendencies in the West.
Such tendencies are coupled with a sense of impunity and
"going it alone attitude," for example on issues of climate
change, the Ministry of International Relations and Cooperation
said in its foreign policy review.
"Further, there is a growing tendency of powerful countries
to reduce complex and interrelated problems of the world to
narrow national interests, including militarist and
transactional approach to diplomacy," said the report.
The immediate consequence of all these are trade wars,
occasioning global market volatilities as well as the flagrant
disregard of important international treaties, the report said.
These have serious negative impact on the United Nations and
the multilateral global governance system in general, the report
The report pointed to a series of political, social and
economic dynamics that have opened major divisions in the
traditional Western alliance.
South Africa believes in the reform of the UN and other
multilateral global governance system so that these are
democratic, inclusive and fully represents the nations of the
world, big and small.
"For the past two-and-half decades, South Africa, working
with other countries of the South, continued efforts at ensuring
that the entire global governance system is transformed," the
While acknowledging the benefits brought about by
globalization such as faster transmission of technology and
innovation, and the potential to accelerate regional,
continental and global economic integration and development, the
report said the process of globalization has still not benefited
a large number of developing countries, but has instead
exacerbated the marginalization of poor countries, with many
having become poorer in recent years.
There is a growing sense that only a few are reaping the
promised dividends of globalization, the report said.
"Not only has the gulf between developed and developing
countries widened, but the wealth of rich elites and the rest of
society within many countries keeps growing," said the report.