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World Bank’s good, bad news for South Africa

The good news is the World Bank expects SA’s economic growth to accelerate to 1.1% in 2018 from 0.8% in 2017.

The bad news is this makes SA a laggard among emerging markets – which are expected to average 4.5% growth this year – and places SA far below the global average of 3.1%.

Sub-Saharan African gross domestic product (GDP) growth is projected to be 3.2% in 2018, led by Nigeria growing 2.5%, while Angola is expected to grow 1.6%, the World Bank said in the January edition of its Global Economic Prospects report released on Tuesday night.

The World Bank raised its estimate of SA’s 2017 GDP growth to 0.8% from 0.6%, “as activity strengthened more than expected in the second half of the year”.

It projected SA’s economic growth to accelerate to 1.1% in 2018 and then to about 1.7% in 2019 and 2020, adding the caveat: “However, policy uncertainty is likely to remain and could weigh on investment.”

The report said: “Strong growth in the agricultural sector, due to improved rainfalls, helped SA exit recession. The mining sector expanded at a solid pace and manufacturing activity rebounded.

“However, growth in the rest of the economy was subdued amid elevated policy uncertainty, which continued to weigh on business confidence.”

The bank also noted a deteriorating situation for individuals.

“In SA, the proportion of poor individuals in the total population rose across all poverty lines between 2011 and 2015. Using the upper bound poverty line (R1,138 per person per month), the proportion of poor individuals increased from 53.1% of the population in 2011 to 55.5% in 2015,” the World Bank said, citing Statistics SA as its reference.


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