World Bank warns SA's lack of innovation holds back growth
South Africa's growth forecast for 2017 has been cut to 0.6%, with poverty expected to worsen
The World Bank has cut its forecast for SA’s economic growth, saying that the country’s low levels of innovation and declining productivity are factors holding back growth.
The bank’s latest economic update on SA, which reports that productivity losses since 2008 cost SA 0.7% of foregone GDP growth every year, comes as ratings agencies continue to raise concern about SA’s "low growth trap" and rising poverty, which are seen as risk factors for its rating.
World Bank SA country director Paul Noumba Um said SA’s productivity growth had diverged from global trends and SA risked falling further behind its peers, with productivity having declined 6% since 2007, while private-sector investment in research and development dropped about 40% since 2009.
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