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IMF MAINTAINS LOW FORECAST

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MBABANE – As vaccines rollouts gain momentum, IMF has revised most countries’ 2021 growth forecasts upwards, while maintaining low figures for Eswatini.

In the latest World Economic Outlook report released two days ago, the International Monetary Fund forecasts a stronger-than-expected global economic rebound from 5.2 to six per cent. With countries like neighbouring South Africa enjoying a slight revision of growth forecasts from 2.8 to 3.1 per cent, Eswatini’s January 2021 forecast of 1.4 per cent has been maintained. Worth mentioning is that Eswatini’s projections indicate a rebound in 2021, with economic output expected to recover from a low base and increase by 2.7 per cent. Meanwhile, for South Africa, the IMF said the gross domestic product (GDP) would now grow at 3.1 per cent this year, up from a revised 2.8 forecast in January due to vaccines concerns. For 2022, the IMF in its  report said South Africa’s economy would advance by  two per cent, up from the previous estimate of 1.4 per cent before moderating at 1.6 per cent in 2026.

Rebound

The IMF’s outlook is slightly lower than the neighbouring country’s Reserve Bank and the National Treasury estimates, which expect the economy to rebound by 3.3 per cent and 3.8 this year, respectively. The global lender also said inflation pressure would remain contained in most countries, including South Africa, where inflation has remained at record lows since the pandemic. Meanwhile, IMF observed that the economic damage from COVID-19 has fallen hardest on developing countries, where healthcare costs and historic falls in output have worsened already-heavy debt burdens. Last week, the IMF and United Nations both warned that the world should be braced for an emerging market debt crisis as the global economy emerges from the pandemic and interest rates rise, drawing capital away from vulnerable countries.

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