South Africa, Bulgaria GDP Growth Cut

The World Bank cut its forecast for South Africa’s GDP growth for 2017 by 0.5 percentage points to 0.6% in its June Global Economic Prospects report released on Sunday. It has lowered its projection for Bulgaria’s economic growth to 3.0%.

World Bank’s forecast for South Africa’s economic growth in 2018 was cut to 1.1% from its projection of 1.8% made in January, news outlets reported.

The World Bank reduced its forecast for many commodity exporters of various countries, including South Africa, in its midyear report compared with its January report.

The new report said the expected recovery in commodity exporters was weaker than envisioned in January, mainly reflecting longer than expected adjustment to low commodity prices in some countries and, to a lesser degree, weaker energy price prospects.

“Recent activity in some metal exporters has been held back by special factors, including production bottlenecks in Papua New Guinea, policy uncertainty in Armenia and South Africa, and mining sector disruptions and natural disasters in Chile and Peru.”

Reasons for lowering South Africa’s expected economic growth also included political uncertainty and low business confidence weighing on investment.

“Growth in South Africa is projected to recover from 0.6% in 2017 to 1.5% in 2018-19. A rebound in net exports is expected to only partially offset weaker than previously forecast growth of private consumption and investment, as borrowing costs rise following the sovereign rating downgrade to sub-investment level,” the report said.

Meanwhile, the World Bank said it has also lowered its projection for Bulgaria’s economic growth to 3.0% in 2017, from 3.2% projected in January, SeeNews reported.

The forecast for Bulgaria’s economic growth in 2018 was increased to 3.2%, from previously projected 3.1%, the World Bank said. The bank has also raised its forecast for Bulgaria’s economic growth in 2019 to 3.3%, up by 0.2 percentage points compared to the projection made in January.

Growth in Europe and Central Asia is forecast to accelerate broadly to 2.5% in 2017, and to 2.7% in 2018, supported by continued recovery among commodity exporters and unwinding of geopolitical risks and domestic policy uncertainty in major economies in the region, the World Bank report said.

Russia is expected to grow at a 1.3% rate in 2017 after a two-year recession and by 1.4% in 2018, with growth helped by gains in consumption.

Kazakhstan is projected to expand at a 2.4% rate this year and 2.6% in 2018 as strengthening oil prices and an accommodative macroeconomic policy stance support economic activity.