South Africa looks increasingly likely to miss its projections for GDP (gross domestic product) growth and faces a potential 'junk' credit rating from all three major ratings agencies.
The World Bank has cut South Africa’s growth forecast for 2019 through to 2021, citing weak investor sentiment and lingering policy uncertainty.
The World Bank has cut South Africa's growth forecast for 2019 through to 2021, citing weak investor sentiment and lingering policy uncertainty. Growth for 2019 is now projected at 0.8%, half a percentage point lower than April's forecast and unchanged from 2018, according to the bank's October Africa's Pulse report.
President Cyril Ramaphosa during a pre-World Economic Forum breakfast briefing on January 18, 2018 in Johannesburg, South Africa.In a recent note, UBS Chief Emerging EMEA Economist Gyorgy Kovacs said early indications point to zero GDP growth in the third quarter, though suggested this was lower than analysts' models and a lot could change once full figures emerge for August and September.
"The electricity sector has been a problem for years, but particularly in the first quarter, there were really serious power cuts, and it looks like the state run electricity generator is still failing to boost output," said John Ashbourne, senior emerging markets economist at Capital Economics.South African state power utility Eskom Holdings, which splashed the cash to approve over $13.
"It looks like the bounce back that we saw in the second quarter wasn't sustained, and that growth was very weak in the third quarter and it is even possible that the economy shrank again."Two days after Finance Minister Mboweni unveils his budget policy, Moody's makes a call on South Africa's credit rating.
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