IMF sees little improvement for SA in 2018
The International Monetary Fund (IMF), in a visit to SA this week, said the country will see little improvement in 2018. The visit, between October 30 and November 8, focused on recent economic developments.
Ana Lucía Coronel, who led the visit, said on Wednesday that the fund sees little improvement for SA after Treasury cut its GDP forecast from 1.1% to 0.7% at the medium-term budget policy statement (MTBPS) at the end of October.
Coronel also urged the Presidential fiscal committee, recently set up to approve fiscal measures "to avoid undue increases in debt-to-GDP ratio".
In a statement on Wednesday, the IMF said: "Despite SA’s institutional strength and favourable global conditions, increasing domestic political uncertainty and stalled reforms point to a challenging economic outlook."
"Downside risks to the outlook relate to worsening perceptions of weak governance, tightening global financial conditions, and slowing trading-partner growth. The economy will also benefit from expeditious action from the Presidential fiscal committee to signal the political will to tackle long-standing issues that have led to deteriorating market sentiment."
The visit from the IMF comes at the same time as an out-of-schedule visit from credit ratings agency Moody’s. Both Moody’s and S&P are set to review SA’s credit rating on November 24 with many economists expecting a downgrade, pushing SA further towards junk status.