NEWS
18/04/2018 06:47 BST | Updated 18/04/2018 06:47 BST

IMF Increases SA's Growth Forecast Thanks To 'Political Changes'

However, the IMF has warned that outstanding structural reforms are still holding SA back.

Jorge Adorno / Reuters
Christine Lagarde, Managing Director of the International Monetary Fund (IMF), looks on during a news conference at Paraguayan Central Bank in Asuncion, Paraguay March 14, 2018.

In what would appear to be a signal of approval for recent changes in the country, the International Monetary Fund (IMF) has revised its growth projections for South Africa, Business Day reported. The IMF now expects South Africa to experience 1.8 percent economic growth in 2018, and 1.7% percent in 2019. In January, the IMF slashed growth forecast for the two years to less than 1 percent.

Medium-term growth is subdued, however, and the IMP reportedly expects growth to "stabilise" at 1.8 percent from 2020-23.

This is reportedly in line with World Bank and Treasury forecasts.

"The change in political leadership" is likely to have positively affected business confidence, but growth prospects "remain weighed down by structural bottlenecks", the IMF reportedly said.

In January, then-deputy president Cyril Ramaphosa met with IMF chief Christine Lagarde on the sidelines of the World Economic Forum in Davos. According to Reuters, the two agreed that "long-standing structural challenges" continued to hamper growth in the country.

"We consequently agreed that bold and timely reforms are needed to create an environment conducive to job creation and less inequality," Lagarde reportedly said.

Ramaphosa became president a month later.

According to MoneyWeb, the IMF said reforms would improve infrastructure in the telecommunications and transport sectors, which would in turn spur on growth.

But South Africa's projected growth forecast remains well below that of sub-Saharan Africa, which is reportedly projected to rise to 3.4 percent in 2018, and 3.7% in 2019.