IMF lifts South Africa's economic forecast for 2017 on agriculture, mining

The International Monetary Fund (IMF) has lifted South Africa’s economic growth forecast this year to 1 percent from an earlier projection of 0.8 percent.

According to the fund, this is attributed to a boost in agricultural production and mining.

“We have upgraded the growth rate this year to 1.0 percent mainly because of two factors. One is the resumption of solid agricultural production following the drought. Production this year has been extremely good, especially for maize.”

“At the same time we expect a modest rebound in mining production, mostly reflecting improved commodity prices, especially for iron ore and coal,” the fund’s senior representative in South Africa, Montfort Mlachila, told Reuters.

He however said, “relatively high levels of perceived policy uncertainty” that have weighed down on consumer and business confidence were among the risks to growth.

The Washington based lender also urged reforms in South Africa’s labour market as well as state-owned companies.

Africa’s most industrialised economy has recently faced slow growth and policy uncertainty led to two global rating firms reducing its credit rating to junk status following a cabinet shake-up in March.