The International Monetary Fund (IMF) has warned of downside risks to South Africa’s economy due to a more protracted global slowdown, further weakening commodity prices and a shift in global investor sentiment away from emerging markets.
The IMF also notes that the electricity crisis, Transnet’s operational and financial weaknesses, the pace of fiscal reforms, and political unpredictability could all have an impact on growth.
Nevertheless, the IMF, which has just concluded meetings with South African authorities, says the growth outlook could improve if the government continues to implement structural reforms combined with fiscal consolidation.
This, together with increased private sector investment in the energy sector, would help boost private investment, employment, and growth.
In response, the National Treasury states that it is aware of the majority of the risks to economic growth and that it is already taking steps to mitigate them, as was stated in the national budget that was unveiled last month.
