THURSDAY, 1.30PM
THE International Monetary Fund (IMF) has put a question mark next to South Africa’s economic growth prospects in its latest World Economic Outlook report. The IMF is sticking to its May projection that SA’s gross domestic product growth will fall to 2,2% this financial year.
The latest report was released at the opening of the IMF and World Bank annual meetings in Hong Kong. It states that SA’s growth has not yet responded to the IMF’s policy reforms, and that economic activity is expected to slow somewhat in 1997. But the report also says that with continued reform efforts and the returns on investors’ confidence, the outlook for SA has begun to improve.
SA and Nigeria, the continent’s two largest economies, are seen to be significantly underperforming against sub-Saharan Africa’s predicted overall average growth rate of 4,1% this year, dragging down the overall growth rate for the region. The IMF report says: “In SA, sustained reform and stabilisation along the lines of the authorities’ announced strategy is needed to enhance growth prospects, while in Nigeria major structural reforms continue to be needed for the economy to begin approaching its productive potential.”
The IMF gave Uganda, Malawi, Ethiopia and Ghana a pat on the back for making significant progress in increasing the role of the private sector and improving macroeconomic discipline. But Africa as a whole is seen as a poor relation to the rest of the world, with savings and investment rates well behind those in successful developing countries.