The World Bank has warned that President Cyril Ramaphosa’s economic stimulus plan will have a limited effect as the bank revised down the country’s growth forecasts. In its regional economic outlook released on Tuesday, the bank said economic growth would remain subdued by high unemployment and slow growth in credit extension to households, which have constrained domestic demand. While the forecasts are higher than that of the Reserve Bank, the World Bank now expects growth of 1.0% in 2018, from 1.4%. The economy has struggled to breach the 2% mark since 2013, while unemployment has edged closer to 30%. President Cyril Ramaphosa announced an economic stimulus plan in September, after weak activity in the primary sectors saw SA enter a recession for the first time since the global financial crisis.

"The economic effect of the stimulus plan is likely to be limited, as it mostly consists of already committed public spending. However, planned reforms — including on mining regulati...

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