Capital markets research firm Intellidex has cut its growth forecast for South Africa’s economy for this year further to 1%, from the previous estimate of 1.2%.
In a statement on Friday, it highlighted a strong risk scenario of negative full-year growth, as a result of load-shedding.
It noted that load-shedding was unavoidable and that it was uncertain how long it would continue for but that it was likely to continue beyond the middle of the year.
Intellidex estimates that the economy has already, in the first quarter, lost about R27-billion as a result of load-shedding and that a further R60-billion is likely to be lost over the remainder of the year.
“For now we . . . highlight a strong risk scenario where growth this year could be -0.2% or even less.”
Intellidex expects this will do severe damage to foreign direct investment prospects for several years, while keeping domestic private sector investment, at best, on a much slower path to recovery.
“We project sluggish investment sentiment on the back of load-shedding to reduce 2020 [economic growth] from 1.7% to 1.5%,” the research firm added.