IMF adjusts growth projection downward

In its World Economic Outlook published on 20 January 2015, the International Monetary Fund (IMF) adjusted the growth outlook for 2015 and 2016 downward by 0,3 percentage points from the October 2014 estimate to 3,5% and 3,7% respectively. The downward adjustment is the result of weaker growth expectations in China, Russia, the euro zone and Japan. Weaker growth is also expected in the oil exporting countries.

According to the IMF, there were four key developments since October 2014. First, oil prices have decreased by 55% since September. This was mainly caused by an increase in oil supply by OPEC and higher production in the USA as well as weak demand in major economies. Second, economic growth in various regions has changed significantly. The US economy has recovered faster than expected, while growth was slower than expected in most other major economies. The third factor was the appreciation of the US dollar, euro and yen. Fourth, some major economies have increased their interest rates.

The IMF estimates growth of 2,1% and 2,5% for the South African economy in 2015 and 2016 – 0,2 and 0,3 percentage points down on the October 2014 forecast.