JOHANNESBURG (Reuters) – The International Monetary Fund (IMF) on Monday lowered its growth forecasts for the South African economy in 2020 and 2021, citing structural constraints and deteriorating public finances.
The IMF now sees the economy growing at 0.8% this year, down from a previous forecast for 1.1% growth, and 1.0% in 2021, down from an earlier prediction for 1.4% growth.
South African President Cyril Ramaphosa has tried to revive Africa’s most industrialized economy after a decade of slow growth, but he has found it hard to push through much-needed reforms and rein in rapidly rising debt levels.
In recent months, nationwide power cuts that have dented economic output and sapped investor confidence in the economy.
Ailing state-owned utility Eskom, which generates more than 90% of the country’s electricity, is struggling to meet demand because of breakdowns at its coal-fired power plants.
In an update to its World Economic Outlook, the IMF also maintained its growth projections for the continent’s largest economy Nigeria at 2.5% for this year and next.
Nigeria has been recovering slowly from a 2016 recession, thanks partly to a recovery in its crucial oil sector.
(Reporting by Alexander Winning; Editing by Alison Williams)