HIGH unemployment in SA was likely to persist for the foreseeable future as domestic growth forecasts continue to be revised downward.
The Bureau for Economic Research (BER), whose surveys the Reserve Bank usually takes into account in its monetary policy committee meetings, has lowered its growth forecast for this year to 2,5% from an earlier estimate of 2,9%.
The BER was joined by Standard Bank, which now expects SA to grow 2,5% this year from an earlier prediction of 2,8%, and investment management company Citadel, which pins growth a less optimistic 2,3% from 2,5% earlier.
Slower economic growth in SA will imply a temporary halt in investment plans by companies as well as fewer job opportunities for millions of unemployed citizens.
BER senior economist Hugo Pienaar said yesterday the bureau's revision was a result of "what is happening in the rest of the world".
He said growth outlooks were being downgraded not only in western countries but in key emerging markets such as China.
"If you say that last year more than 40% of exports went to the European Union, the US and China - and growth for all of those areas has been downgraded - it says our export performance is going to be worse this year," Mr Pienaar said.
The BER identified domestic factors constraining economic performance as easing real consumer spending in line with softer real disposable income growth, and weaker private sector fixed investment.
"The private sector is hesitant to invest on a large scale because of the uncertainty," Mr Pienaar said.
The BER forecast growth at 3,3% next year from 3,6%, while Standard Bank predicted growth of 3,1% from 3,4%. The Reserve Bank's latest forecast is 3,8%.
Citadel chief economist Dave Mohr suggested that many of next year's growth forecasts, including those by the Reserve Bank and the Treasury, seemed "too ambitious", and that those closer to just 3% "and not anything above" appeared more realistic given that it would take a few years for the eurozone economic woes to be resolved.
Mr Pienaar identified lower inflation, which by implication meant accommodative interest rates, as the only ray of hope from the slowdown. The BER expected consumer inflation to moderate further, remaining below 6% for the rest of this year and next, averaging 5,3% in the final quarter of this year and 5,5% in the final quarter of next year.
Rising food and oil prices were not seen as having an effect on the outlook in the short term. "It takes time for higher food prices to work through into the CPI (consumer price index," Mr Pienaar said.
Standard Bank economist Thabi Leoka painted a gloomy picture of global growth prospects, saying a Greek eurozone exit could "cripple" economies in other continents.
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