Jul 17, 2012
SA growth forecast lowered as world economy strugglesBack
Absa Capital|Africa|Efficient Group|Engineering|Export|Africa|Asia|Europe|Angola|Libya|Nigeria|South Africa|United Kingdom|United States|Zambia|Manufacturing|Manufacturing Sector|Ilke Van Zyl|Merina Willemse|Insulation|Middle East|North Africa|Sub-Saharan Africa
© Reuse this
Although 2012 growth projections for the eurozone remained unchanged in the Economic Outlook (WEO) Update, published this week, growth rates for the UK and US were lowered to 0.2% and 2%, respectively.
“South Africa is a small, open economy that is vulnerable to what happens in the developed economies, especially through the trade links and by extension our manufacturing sector, which is in close correlation with our export sector,” Absa Capital macro economist Ilke van Zyl told Engineering News Online.
The country’s projected growth rate for 2013 was also lowered to 3.3% from 3.4% in the April forecast.
Van Zyl pointed out that although the projected growth rate of 3.3% for next year, which would hinge on the situation in the eurozone, was an improvement on the 2012 growth forecast, it was still not seen as significant growth.
“This suggests sluggish growth going forward, hampered by high debt levels,” she noted.
Similarly, sub-Saharan Africa’s growth for 2012 was lowered to 5.4%, from 5.5%, but remained the same for next year at 5.3%. This marked a fairly robust growth trend, which the IMF attributed to the region's relative insulation from external financial shocks.
“The sub-Saharan Africa economy is bucking the global growth trend; it is no longer Asia,” Van Zyl said.
Efficient Group economist Merina Willemse stated that higher growth in the region, compared with South Africa, was driven by countries such as Angola, Zambia and Nigeria.
On a global scale, the IMF report projected growth this year to remain relatively weaker than in 2011, especially in regions connected more closely with the euro area.
However, in contrast with the broad trends, growth in the Middle East and North Africa would be stronger in 2012 to 2013 relative to last year, as key oil exporters continued to boost oil production and domestic demand, while activity in Libya was rebounding rapidly after the unrest in 2011.
The IMF noted in its updated WEO that in the past three months, financial market and sovereign stress in the euro area periphery have ratcheted up close to end-2011 levels, while growth in a number of major emerging market economies has been lower than forecast, partly owing to a somewhat better-than-expected first quarter that projected world growth to be 3.6% in 2012.
However, the revised baseline projections in the WEO Update suggested that these developments would only result in a minor setback to the global outlook, with global growth at 3.5% in 2012 and 3.9% in 2013, marginally lower than 3.6% in the April report.
Willemse maintained that Europe’s economic issues would take time to resolve and that recovery would be slow. She, however, noted that 2012 would be the turning point.
Edited by: Mariaan Webb© Reuse this
Creamer Media Senior Researcher and Deputy Editor Online
To subscribe email firstname.lastname@example.org or click here
To advertise email email@example.com or click here
Other Statistical Releases News
Updated 8 minutes ago Africa was entering a phase of becoming the factory of the world requiring the building of facilitating infrastructure, Credit Suisse Securities chairperson Rick Menell. Speaking during a panel discussion at the 2016 Investing in African Mining Indaba, Menell...
Updated 41 minutes ago If the latest mosquito-borne Zika virus breaks out in Africa the continent would be less prepared than any other to deal with the outbreak. Zika fever is a mosquito-borne viral disease caused by the Zika virus which is suspected of leading to the birth of deformed...
Updated 1 hour 18 minutes ago The Gupta brothers on Tuesday obtained an urgent interdict to stop the EFF from threatening them. Judge Johan Louw granted an order in the High Court in Pretoria, interdicting the party, its leader Julius Malema and its Gauteng spokesperson Ntobeng Ntobeng from...
Recent Research Reports
Construction 2016: A review of South Africa's construction industry (PDF Report)
Creamer Media’s Construction 2016 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; key participants; local demand; geographic diversification; corporate activity; black economic...
Energy Roundup – February 2016 (PDF Report)
The February 2016 roundup covers activities across South Africa for December 2015 and January 2016 and includes details of a Government Gazette notice that confirms Cabinet’s decision to move ahead with the 9 600 MW nuclear procurement programme; State-owned power...
Energy Roundup - December 2015 (PDF Report)
The December 2015 roundup includes details of State-owned utility Eskom’s application to claw back R22.8-billion; South Africa’s ranking as an investment destination for renewable energy; and a nuclear expert’s thoughts on reactor designs for South Africa’s nuclear...
Water 2015: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2015 Report considers the aforementioned issues, not only in the South African context but also in the African and global context in terms of supply and demand, water stress and insecurity, and access to water and sanitation, besides others.
Input Sector Review: Pumps 2015 (PDF Report)
Creamer Media’s 2015 Input Sector Review on Pumps provides an overview of South Africa’s pumps industry with particular focus on pump manufacture and supply, aftermarket services, marketing strategies, local and export demand, imports, sector support, investment...
Liquid Fuels 2015: A review of South Africa's liquid fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2015 Report examines these issues in the context of South Africa’s business environment; oil and gas exploration; fuel pricing; the development of the country’s biofuels industry; the logistics of transporting liquid fuels; and...
This Week's Magazine
Power and automation company ABB is in the launch phase of its highest payload, multipurpose industrial robot, the IRB 8700. The robot has a reach of 3.5 m and can handle a payload of up to 800 kg. “When designing the IRB 8700, we emphasised reach and payload, as...
Identity and Access Management (IAM) is a critical facet of a connected security ecosystem, as controlling the confidentiality, integrity and authorisation of data access and use is key to securing new digital business channels. However, companies face several...
Data underpins digital business models, the digital economy, the Internet of Things and the fundamental changes in the ways people interact and protecting data is crucial to securing new ways of doing business, says T-Systems South Africa information and...
The City of Cape Town will issue a tender for the procurement of electric buses for its MyCiTi service, in line with the council’s commitment to lower its carbon footprint, says executive mayor Patricia de Lille. The tender, to be advertised early in February, will...
The iSimangaliso Wetland Park Authority signed a R10-million contract last month with local tailings storage facility specialists Cyclone Engineering Projects to remove about 100 000 m3 of dredge spoil obstructing the natural course of the uMfolozi river, in...