Picture: REUTERS
Picture: REUTERS
Photograph by: Picture: REUTERS 

THE International Monetary Fund (IMF) has significantly cut SA’s economic growth outlook for this year from 1.3% to 0.7%, the lowest forecast on record so far.

The growth projection for next year was revised down to 1.8% from 2.1%.

SA was among the region’s largest economies whose growth would be negatively affected by lower commodity prices and higher borrowing costs, the IMF said in its World Economic Outlook update on Tuesday.

Subdued economic growth means lower investment spending by the private sector and modest job creation. It also means sovereign credit rating downgrades remain a possibility.

Sub-Saharan Africa is forecast to grow at 4% this year, down from an earlier projection of 4.3%. The region is expected to grow by 4.7% next year, revised from an earlier forecast of 4.9%.

The global economic growth outlook for this year was reduced from 3.6% to 3.4%, while that for next year was revised from 3.8% to 3.6%. The global growth revisions reflected to a large degree a weaker pick-up in emerging economies, the IMF said.

Global economic growth could be even lower than expected if growth in China slowed more than projected, higher US interest rates caused a rise in global risk aversion and sharp depreciation in emerging-market currencies, and geopolitical tension escalated, the IMF warned.