Global slowdown would hit South Africa hard, says IMF

Global slowdown would hit South Africa hard, says IMF:
Sub-Saharan Africa's economy is expected to grow by 5.25% in 2011, but if global growth slows, South Africa will be particularly hard hit, the International Monetary Fund (IMF) said on Wednesday.

The IMF predicted that the region's economy would grow 5.75% in 2012.

"In particular, our projection for 2012 is highly contingent on global economic growth being sustained at about 4%," according to an IMF report on sub-Saharan Africa's economic outlook.

"If growth in advanced economies slows further and curtails global demand, the region's ongoing expansion is likely to face significant headwinds, with South Africa and others that are more globally integrated likely to be affected the most."

South Africa, a middle-income country with slower growth compared to the regional average, had yet to see its output and employment return to pre-crisis levels.

"Policies here should clearly remain supportive of output growth, and even more so if global growth sputters," the IMF said.

Slower growth forecast
South Africa was forecast to grow at about 3.5% for 2011 and 2012.

"The recent global market turmoil, and its likely restraining impact on growth in advanced economies, is expected to limit growth in South Africa to about 3.5% this year and next."

The IMF said the main economic threat to the region was the strong possibility that global growth would decelerate further, particularly in 2012.