The World Bank has further lowered South Africa’s projected economic growth rate for 2014 from 2.7% to 2.0% and predicts the economy to grow 3% next year and 3.5% by 2016, according to its latest global economic prospects report.
The bank said growth in SA will remain subdued on the back of tight monetary policy, combined with labour strikes, as well as deficient electricity supply.
“In South Africa, the region’s second largest economy, growth slowed notably owing to structural bottlenecks, tense labour relations, and low consumer and investor confidence,” it said.
Meanwhile the World Bank said Sub-Saharan Africa’s GDP is projected to remain stable at 4.7% in 2014 and to rise to 5.1% in 2015 and 2016.
“The outlook is sensitive to downside risks from lower commodity prices, tightening global financial conditions, and political instability,” said the World Bank.
Excluding South Africa, average GDP growth for the rest of the region in 2013 was 6.0%, second only to developing East Asia and Pacific at 7.2%.