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Loadshedding: The World Bank has cut SA's economic growth forecast to below 1%

9 January 2020 6:43 PM
Tags:
Eskom
Economy
Diesel
Electricity
World Bank
Coal
#EskomLoadShedding

As a result of ongoing problems at Eskom, the World Bank has cut SA's economic growth forecast to below 1% for 2020.

As a result of ongoing problems at Eskom, the World Bank has cut SA's economic growth forecast to below 1% for 2020.

The Money Show asked Razia Khan, from Standard Chartered Bank, to look at the data and see if there is any hope for growth in any sector.

The expectation that this can take on greater severity next week as everybody goes back to work, does create a great deal of uncertainty:: 2020 - another year of sub-one per cent growth. We think, however, it is important to not overdo the alarm. But we do need to pay attention to what may happen to the country more broadly.

Razia Khan , Managing Director, Chief Economist, Africa and Middle East Global Research - Standard Chartered Bank

If we were to focus on the data - we saw there was a point when there were some green shoots - a degree of recovery with household consumption expenditure - but this trend does seem to be weakening. Maybe electricity is going to be the factor that will pull the rug out underneath of everything.

Razia Khan , Chief Economist, Africa and Middle East Global Research - Standard Chartered Bank

We did see at least two consecutive quarters of positive private sector investment growth last year. Last year, expectation had been built that there will be some recovery in consumption We know that consumers have been doing what economists term balance sheet repair… paying off their debts. There are also hopes that investment that has been so sluggish all along, would finally turn around. A lot now depends on private sector investment - are we going to see an acceleration?

Razia Khan , Chief Economist, Africa and Middle East Global Research - Standard Chartered Bank

The question is, are we not tired of hope and all the talk of resilience?

Looking at the data, is another downgrade not simply inevitable?

The February budget will shed a lot more light on this. For the moment, almost everyone’s expectation is that there is an almost inevitability around it.

Razia Khan , Chief Economist, Africa and Middle East Global Research - Standard Chartered Bank

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9 January 2020 6:43 PM
Tags:
Eskom
Economy
Diesel
Electricity
World Bank
Coal
#EskomLoadShedding

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