World Bank forecasts 1.3% growth for South Africa

In its latest report, the World Bank projected the economy will grow at 1.7% in 2020.

The World Bank has predicted that South Africa’s gross domestic product will grow by 1.3 percent this year.

This is an improvement from a forecast of 0.9 percent for 2018.

However, it also warned of risks such as global trade tensions and poor balance sheets of state-owned companies.

The World Bank said economic growth would be supported by the implementation of structural reforms under President Cyril Ramaphosa such as relaxed visa regulations, the establishment of an infrastructure fund and progress on the Mining Charter.

In its latest economic update report, the bank also projected South Africa’s economic growth at 1.7 percent in 2020.

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 Speaking at a news conference in Johannesburg, Sebastien Dessus, the World Bank’s programme leader for South Africa siad the bank believes the country’s reforms are going in the right direction but must be implemented

The World Bank, however, said South Africa faces risks such as the impact of state-owned enterprises like power utility, Eskom on the national budget  El Nino weather conditions that could impact crop production and global trade tensions 

On Power supply, Paul Noumba Um, the World Bank’s country director for South Africa said South Africa cannot afford to have Eskom as a failed entity. He advised the government to work with the management and leadership of Eskom to figure out the way forward.

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“The way forward entails different kind of interventions. There is a debt restructuring dimension and at the same time the company itself has to become more efficient’ he said

Eskom is currently facing a severe financial crisis and South Africa’s President; Cyril Ramaphosa has appointed a team to look into Eskom’s business and funding model and how the power utility should be structured. 

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