The Reserve Bank is forecasting an economic growth rate of 0.6% this year, climbing to 1.8% next year and 2% in 2021.
The Bank says the domestic economy remains weak, with high unemployment rate. However, it says the inflation is within the target.
Reserve Bank Governor Lesetja Kganyago says South Africa’s Foreign Direct Investment (FDI) levels are still low compared to other G20 countries.
However, he is optimistic about growth in the coming years. “The important thing to watch is FDI; and whether we are seeing a rise in FDI levels, it is still low compared to that of our peers and I guess that is why the President went on this big investment drive.”
On Wednesday, credit rating agency Moody’s has lowered South Africa’s economic growth outlook to 0.7%, from 1% for the 2019-20 financial year.
Lead Sovereign analyst at Moody’s, Lucie Villa, said the growth forecast of all G20 countries, which includes South Africa was revised downwards due to external factors such as US-China trade tensions and the global economic slowdown. – Additional Reporting Naledi Ngcobo