AfDB cuts South Africa growth outlook by half on trade concerns
South Africa must accelerate structural reforms to offset global challenges that include US President Donald Trump’s trade war, the African Development Bank (AfDB) said as it cut the nation’s economic forecast.
It lowered its forecast for Africa’s most-industrialised economy to a meagre 0.8% this year from a previous estimate of 1.6%, the Abidjan-based lender said in an update to its Country Focus Report for South Africa.
“This is mainly on the fact that we expect trade tensions to pretty much affect net exports negatively,” AfDB country economist Akhona Peter said on Wednesday at an event near Pretoria.
Other risks to the outlook include funding cuts for development assistance and an economic slowdown in China.
South Africa’s Treasury in May trimmed its growth forecast for the year to 1.4% from a prior 1.9%, citing geopolitical tensions including Trump’s trade levies. The US is South Africa’s second largest export destination after China.
The country faces a 31% US import tariff which is expected to be reinstated on July 9 after it was initially postponed. Trump said on Wednesday that he is not considering delaying them again.
“Industries such as agriculture, which rely heavily on US market access, will be particularly vulnerable,” the AfDB said. “In the short-term, this could slow economic activity, decrease firm profitability, and constrain job creation in export-linked industries.”
Domestic risks to the economic outlook include “infrastructure gaps electricity shortages, logistical bottlenecks, and fiscal vulnerabilities arising from the bailout of State-owned enterprises,” the lender said.
Comments
Projects
Latest Multimedia
Latest News
Showroom
Leading condition monitoring specialists, WearCheck, help boost machinery lifespan and reduce catastrophic component failure through the scientific...
VISIT SHOWROOM
Press Office
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation
