Kelly Choos 
While the country’s finance ministry predicts the economy will grow 5.1 percent this year, the International Monetary Fund has said it expects growth of 4.6 percent.
JOHANNESBURG – South Africa’s economy has rebounded from COVID, the IMF said on Wednesday while predicting slower-than-government growth with a “lackluster” medium-term outlook.
While the finance ministry predicts the economy will grow 5.1% this year, the International Monetary Fund has said it expects growth of 4.6%.
“The recovery has also been supported by external factors, such as favorable commodity prices and favorable financial conditions, which are likely to be temporary,†the IMF said.
South Africa’s economy contracted 6.4% last year, when a strict lockdown crippled most economic activity in the continent’s most industrialized country.
Power cuts forced by aging and poorly designed power plants have compounded the economic problems.
Deadly riots in July also scared investors, as businesses were looted and ransacked in Gauteng and KwaZulu-Natal.
“Even more alarmingly, the rebound did not lower the unemployment rate amid deteriorating confidence (exacerbated by the July episode of social unrest), anemic private sector investment and the expansion of weak credit, â€the IMF said.
“Staff therefore project a dull medium-term outlook, with average growth of 1.4% per year,” he added.
The IMF said investors were put off by unreliable electricity, telecommunications and transportation in South Africa. He also called for more flexibility in the labor market, better education and increased anti-corruption efforts.
The Treasury took note of the IMF report and said its findings largely align with efforts already underway to revive the economy.
“In general, the IMF’s concerns are aligned with the government’s response program to stimulate economic growth,” the Treasury said in a statement.
