World Bank cuts SA’s GDP forecast due to load shedding

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The World Bank has cut economic growth for South Africa to below 1% for 2020 due to electricity concerns.

The bank forecasts the country’s growth at 0.9% in its Global Economic Prospects report released on Wednesday.

The bank cited electricity supply and infrastructure constraints as impediments to domestic growth. The bank’s revision comes as Eskom resumes rolling blackouts earlier than expected.

The bank says the 0.9% projection assumes that the government’s reform agenda gathers pace and policy uncertainty is addressed and investment gradually recovers.

Chief Economist at Efficient Group Dawie Roodt says, “Well I’m afraid I’m going to have to agree with the World Bank, their expectations of economic growth of less than 1% is in line with my own expectations and its quite likely that we’re going to see economic growth well below 1% for 2020, because of electricity but because of some other constraints as well that will lead to a further increase in unemployment and poverty in 2020…”

“I’m afraid 2021 is likely to see a similar kind of situation,” added Roodt.

Meanwhile, Eskom continues to struggle to keep the lights on with stage 2 load shedding extended to Friday morning.

The power utility says it has lost additional generation capacity with breakdowns of over 14 000 Megawatts.

It also says emergency reserves are also insufficient to meet the demand for electricity during the day.