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IMF warns South Africa’s economy still faces major risks

South Africa still faces major risks despite a stabled economic growth forecast for 2018, the International Monetary Fund has warned

Published

6 years ago

July 31, 2018

Africa News Watch

South Africa still faces major risks despite a stabled economic growth forecast for 2018, the International Monetary Fund has warned.

On Monday the IMF maintained South Africa’s growth forecast at 1.5 percent but says the economy faces several challenges.

The Fund said those challenges mainly arise from rapid rise in public debt and potential bailouts to state firms.

National Treasury said in a statement that “The IMF’s concerns on fiscal policy relates to the rapid increase in public debt as a share of GDP, which has doubled over the last decade, depleting fiscal buffers and constraining fiscal policy space”.

The treasury was quoting the IMF’s article IV statement following a two week-long country visit by the lender’s officials.

“Risks related to potential SOE’s (state-owned enterprises) bailouts will further constrain fiscal policy” the statement added.

South Africa recently announced series of investment portfolios it was receiving from foreign countries including China.

China has said it is to invest $14.7 billion in South Africa as the Asian super power deepens its trade relations in Africa.

Meanwhile the New Development Bank, set up by the BRICS group of emerging economies, has approved loans of $300 million for energy projects in South Africa.

These facilities are to propel the growth of the South African economy.

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Moroccan annual inflation rises to 0.8% in November

Published

17 hours ago

December 21, 2024

Ifeoluwa Dada

Morocco’s statistics office has confirmed that the country’s annual inflation rate, as determined by the consumer price index, increased from 0.7% in October to 0.8% in November.

Monthly, consumer prices decreased by 0.2% from October.

The primary driver of inflation, food costs, grew by 0.8% compared to the previous year, while non-food inflation climbed by 0.7%. Core inflation, which does not include more erratic items like food, increased 2.6% annually and 0.2% monthly.

According to the central bank, inflation is expected to average 1% this year, down from 6.1% last year.

Despite the Al-Haouz earthquake, a spike in inflation, and worldwide economic challenges, Morocco’s GDP grew by 3.4% in 2023.

A recovery in tourism, robust industrial exports, and rising private consumption—all bolstered by prudent macroeconomic policies—were the main drivers of growth.

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Nigeria’s $42bn foreign reserves enough for 9 months’ imports— Central Bank

Published

2 days ago

December 20, 2024

Ifeoluwa Dada

According to Olayemi Cardoso, Governor of the Central Bank of Nigeria (CBN), the nation’s $42.01 billion in foreign reserves can cover imports of goods and services for almost nine months.

Cardoso promised Nigerians improved economic fortunes in 2025 while addressing the Senate Committee on Banking, Insurance, and Other Financial Institutions yesterday in Abuja at the presentation of the performance index report.

Cardoso stated: “External Reserves rose from $ 38.35 billion it was on September 30, 2024, to $ 42.01 billion as of December 12, 2024”.

He clarified that third-party receipts in Q3 2024 and revenues from taxes connected to crude oil were the main drivers of the rise in foreign reserves during the specified time.

“We saw remarkable improvements in our trade balance and maintained a current account surplus,” he added.

“Our external reserves level can finance over 9.09 months of import of goods and services or 13.91 months only, higher than the international benchmark of 3.0 months and a robust buffer against shocks”.

On cash shortage, the CBN boss reiterated the N150 million fine against any branch of banks caught illegally distributing new Naira notes to currency hawkers and unscrupulous elements and said the Nigerian economy will improve in 2025 through policies and measures.

He predicted a stronger economic future: “Despite our economy’s challenges, there are clear reasons for optimism.

“The gradual stabilization of the forex market, ongoing banking sector recapitalization, and positive growth trends in key sectors, especially the services sector, indicate a path toward recovery and stability.”