JOHANNESBURG, July 24 (Reuters) – Growth in South Africa for
2012 is likely to be lower than earlier expected, the World Bank
said on Tuesday, a day after Finance Minister Pravin Gordhan
said the government would also lower its forecasts.
“A weakened global economy and dampening of consumer and
business confidence are triggering a slowdown in South Africa’s
growth momentum,” the World Bank said in a report, cutting its
growth forecast to 2.5 percent from the 3.1 percent seen last
November.
“South Africa is highly integrated with the global economy,
and is therefore susceptible to the ongoing slowdown in the Euro
zone countries and China, the two principal export destinations
for its goods and services,” said World Bank country director
Asad Alam.
Expansion in Africa’s biggest economy is likely to miss the
government’s current forecast of 2.7 percent, Finance Minister
Pravin Gordhan said on Monday, while the central bank sounded a
warning about its vulnerability renewed global weakness.
The World Bank report said South Africa’s progress toward
universal access to basic opportunities had seen mixed results,
with impressive gains made in access to primary education,
electricity and telecommunications.
But there were still inequalities in the provision of water,
sanitation, health insurance and employment opportunities.
“The employment situation is especially challenging for the
younger labour force, residents of townships/informal
settlements and rural areas, and the non-white segments of the
population,” it said.
President Jacob Zuma’s government has in the last few years
grappled with often violent protests in poor townships by blacks
bitter that they still have poor access to water, sanitation and
housing 18 years after the end of white minority rule.
The government has singled out an unemployment rate of 25
percent as one of its major challenges, and economic growth
remains far below the 7 percent needed to significantly slash
the jobless rate.
“The policy challenge is to find a way to break this
vicious, self-perpetuating cycle of inequality in South Africa,”
the World Bank report said.
(Reporting by Stella Mapenzauswa; editing by Ron Askew)
