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Despite record levels of load shedding, the International Monetary Fund (IMF) expects South Africa’s economy will grow by 1.2 percent this year, which is slightly higher (+0.1 percent) than its forecast in October last year. It expects growth of 1.3 percent next year.

Last week, the Reserve Bank slashed its expectation for growth this year to only 0.3 percent.

The IMF expects that the South African economy expanded by 2.6 percent in 2022, reflecting a post-pandemic rebound, but that “weaker external demand, power shortages, and structural constraints” will weigh on growth this year.

The IMF raised its global economic growth outlook for the first time in a year, with resilient US spending and China’s reopening buttressing demand against a litany of risks.

Gross domestic product will likely expand 2.9 percent in 2023, 0.2 percentage point more than forecast in October, the fund said Tuesday in Singapore in a quarterly update to its World Economic Outlook. While that’s a slowdown from a 3.4 percent expansion in 2022, the IMF said it expects growth will bottom out this year, accelerating to 3.1 percent in 2024.

Central banks’ interest-rate hikes and Russia’s invasion of Ukraine will continue to weigh on economic activity this year amid a protracted inflation crisis, the Washington-based institution said.

The fund sees world consumer-price increases slowing to 6.6 percent this year, 0.1 percentage point higher than the October projection, following 8.8 percent in 2022. 

It forecast further slowing to 4.3 percent in 2024. Inflation rates are expected to be lower in about 84 percent of countries in 2023 than in 2022. — CNBC