The credit rating agency Moody’s cut expectations for South Africa’s economic growth rate by 2020 to below 1%.
The previous forecast, in November, was 1%. Now growth for the year is expected to be just 0.7%.
The growth expected for 2019 has also been adjusted downward to now at 0.3%. This figure will be released in March.
“We attribute the persistent weak economy in South Africa to the weak demand from the private sector – both household spending and investment – as well as the detrimental effects of widespread power cuts on manufacturing and mining.”
In addition, the country’s gross domestic product (GDP) is also expected to grow by less than 1% next year, by 0.9%. Previously, it was expected to be 1.2%.
The information is part of Moody’s latest outlook for international economic growth.
South Africa is among four emerging countries whose growth prospects have been adjusted downwards.
Moody’s says in its statement that the growth outlook for South Africa, India and Mexico has been substantially downgraded, but it reflects domestic problems rather than external factors.
The growth rate for the entire global economy was lowered by 0.2 percentage points this year.
“The coronavirus epidemic creates a new risk for the prospect of beginning to stabilize global growth this year thanks to the US-China trade war.”
China’s growth forecast for this year was lowered to 5.2%.