The International Monetary Fund (IMF) has projected that Nigeria’s economy will grow at a faster pace than South Africa’s in 2018.
According to its World Economic Outlook, WEO, for July 2017, the IMF said Nigeria will grow at 1.9 per cent in 2018, while South Africa will only climb by 1.2 per cent.
In 2016, the Nigerian economy contracted by 1.6 per cent, while South Africa expanded by 0.3 per cent. Projections for 2017 put South Africa’s growth at one per cent, while Nigeria is expected to muster just 0.8 percent.
The Bretton Woods institution, which held global growth projections at 3.5 per cent in 2017 and 3.6 per cent in 2018, said growth was marked down in South Africa due to elevated political uncertainty.
“In Sub-Saharan Africa, the outlook remains challenging. Growth is projected to rise in 2017 and 2018, but will barely return to positive territory in per capital terms this year for the region as a whole—and would remain negative for about a third of the countries in the region,” the IMF said via WEO. “The slight upward revision to 2017 growth relative to the April 2017 WEO forecast reflects a modest upgrading of growth prospects for South Africa, which is experiencing a bumper crop due to better rainfall and an increase in mining output prompted by a moderate rebound in commodity prices.
However, the outlook for South Africa remains difficult, with elevated political uncertainty and weak consumer and business confidence, and the country’s growth forecast was consequently marked down for 2018.
IMF also added that global growth will be aided by growths in the US and the UK, who are projected to grow at 2.1 percent and 1.5 percent respectively.
China’s growth projections have also been revised up (6.7%), reflecting a strong first quarter of 2017 and expectations of continued fiscal support.
“Inflation in advanced economies remains subdued and generally below targets; it has also been declining in several emerging economies, such as Brazil, India, and Russia.”