World Bank revises SAâs growth outlook 0.2% upwards for this year
By Siphelele Dludla
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THE WORLD Bank has revised South Africaâs 2021 growth outlook upwards by 0.2 percentage points as the continuing commodity supercycle is expected to benefit from the strong growth and demand in China.
In its June Global Economic Prospects report released yesterday, the World Bank said South Africaâs gross domestic product (GDP) would rise from a forecasted 3.3 percent to 3.5 percent.
The World Bankâs forecast comes as Statistics South Africa revealed yesterday that the economy failed to expand at a quicker pace in the first three months of this year. Headline GDP in South Africa rose by 1.1 percent in the first quarter of 2021, translating into an annualised growth rate 4.6 percent.
The rand hit its firmest since February 2019 last week, driven by investor bets that the US central bank would lend at low rates for longer despite signs of higher inflation in the world’s biggest economy.
The global economy is set for much better growth than anyone would have dared to hope for in the darkest days of the pandemic when businesses were shuttered and mobility severely restricted. This week the Organisation for Economic Co-operation and Development (OECD) upgraded its 2021 growth forecast to 5.8% a far cry from the anticipated 3.3% in its interim report in March 2020 at the height of economic and personal uncertainty.
But the organisation stressed that this is no ordinary recovery, with growth experiences varying widely across its 38-country membership base. South Africa got a special mention in its May 2021 Economic Outlook because it is only expected to recover its pre-pandemic per capita income levels after five years, in the fourth quarter of 2024, versus 1½ years for the US.
The South African Reserve Bank (SARB) has warned in its Financial Stability Review (FSR) that there are still material risks to the country’s financial stability in spite of the improving economic outlook for 2021.
Rand at one-year high off weaker dollar in spite of negative ratings outlook
By Siphelele Dludla
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JOHANNESBURG - THE RAND yesterday rose to a one-year high amid a subdued dollar in spite of rating agencies maintaining their junk status and negative outlook on South Africaâs sovereign debt.
The domestic currency strengthened 0.03 percent to R13.91 against the greenback by 5pm, its highest level since early January last year, on a positive growth forecast.
The South African Reserve Bank (SARB) last week upwardly revised its 2021 growth forecasts to 4.2 percent, from an earlier projection of 3.8 percent.
The rand appears to want to stay below the R14 mark around which it traded last week, despite an increase in global risk aversion.