R/€ = 15.22Change: 0.03
R/$ = 14.37Change: 0.01
Au 1055.79 $/ozChange: -2.09
Pt 827.50 $/ozChange: -8.00
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?

And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Letters Contact Us
RSS Feed
Article   Comments   Other News   Research   Magazine  
Jul 17, 2012

SA growth forecast lowered as world economy struggles

Engineering|Absa Capital|Africa|Efficient Group|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

Weaker recovery in the world economy over the past three months has seen the International Monetary Fund (IMF) slightly lowering South Africa’s growth forecast for 2012 to 2.6% from 2.7% projected in April.

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
Creamer Media Senior Researcher and Deputy Editor Online
© Reuse this Comment Guidelines (150 word limit)
Latest News
French conglomerate Bollore may have to halt work on the Niger to Benin section of its giant West Africa rail project after a rival company won a court order to stop it going ahead. The dispute concerns rival rail schemes in the area.
A week ahead of the second annual gathering of the Forum on China–Africa Cooperation (Focac), in Johannesburg, the JSE is rolling out the proverbial red carpet for Chinese investors looking to Africa’s largest bourse for possible investment opportunities, calling...
The South African National Roads Agency Limited (Sanral) applied for leave to appeal on Friday against the Western Cape High Court judgment that set aside the approvals that would enable it to toll sections of the N1 and N2 freeways in Cape Town. This prompted the...
Recent Research Reports
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...
Road and Rail 2015: A review of South Africa's road and rail sectors (PDF Report)
Creamer Media’s Road and Rail 2015 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail infrastructure and network, the funding and maintenance of these respective networks, and...
Defence 2015: A review of South Africa's defence sector (PDF Report)
Creamer Media’s Coal 2015 report examines South Africa’s coal industry with regards to the business environment, the key participants in the sector, local demand, export sales and coal logistics, projects being undertaken by the large and smaller participants in the...
Real Economy Year Book 2015 (PDF Report)
There are very few beacons of hope on South Africa’s economic horizon. Economic growth is weak, unemployment is rising, electricity supply is insufficient to meet demand and/or spur growth, with poor prospects for many of the commodities mined and exported. However,...
This Week's Magazine
The BMW Group will invest R6-billion at BMW Group South Africa’s (BMW SA’s) Rosslyn plant to produce the next-generation X3 sports-activity vehicle (SAV) for the local and export markets. Rosslyn will continue production of the current 3 Series through its lifecycle,...
The lack of consequences for poor performance and transgressions on the part of contractors remains a significant hurdle to tackling South Africa’s service delivery challenges, delegates heard at the Consulting Engineers South Africa Infrastructure Indaba, on...
City of Ekurhuleni executive mayor Mondli Gungubele earlier this month officially named the city’s bus rapid transit (BRT) system, Harambee.
NICK CHRISTODOULOU As about 58% of data stored by organisations is dark, they must identify this dark data to expose risks and valuable information
About 58% of unstructured data stored by companies is dark data, which means that the value or regulatory importance of the data has not been determined. Subsequently, most of the stored data add costs, rather than increasing revenue or reduce regulatory risks, says...
BRIAN VERWEY Effective management, review and administration of non-core elements can improve business operations and increase revenue and decrease unforeseen risks
Effective logistics, import/export and manufacturing consulting services require detailed industry knowledge and experience, but can add significant value to these industries by providing expert advice on various technical elements in their value chains, says...
Alert Close
Embed Code Close
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks
Subscribe Now for $96 Close
Subscribe Now for $96