JOHANNESBURG (Reuters) – The World Bank on Tuesday halved its 2017 growth forecast for South Africa after the economy fell into recession earlier this year.
It said in a report that 2017 growth would probably be 0.6 percent, down from an earlier estimate of 1.1 percent. Growth is seen ticking up to 1.1 percent next year and reaching 1.7 percent in 2019.
But the bank warned any prospect of recovery would “remain fragile” unless South Africa succeeds in becoming more productive.
“South Africa is not benefiting from the global economic rebound. South Africa is well placed in exports markets but we don’t see the country’s exports breaking into new markets,” World Bank southern Africa specialist Sebastian Deussus said.
President Jacob Zuma last month said South Africa’s 2017 growth would be below 0.5 percent, down from a forecast of 1.3 percent in February, after the economy fell into recession in the first quarter.
South Africa emerged from the recession in the second quarter as a recovery in agriculture helped the economy expand.
But since South Africa emerged from its 2009 recession, growth has fallen short of the government’s target of 5 percent, the level economists say is needed to curb unemployment.