International rating agency Fitch on Thursday cut South Africa’s growth forecast to 2.1 percent in 2015 and 2.3 percent in 2016.
The agency attributed the development to worsening shortage of electricity supply that has gripped the country for half a year.
Fitch Managing Director Ed Parker told a conference in Johannesburg that if the electricity shortage eases, South Africa’s economic growth could rise to 3.1 percent in 2017.
South Africa has been experiencing the worse energy crisis since 2008 and due to the grave impact of the country’s electricity crisis on the GDP, the World Bank had expected South Africa’s GDP growth to be two percent in 2015.
South Africa’s GDP slowed down in the first quarter of 2015, increasing only 1.3 percent, compared to the 4.1 percent year-on-year growth in the fourth quarter of 2014, according to Statistics South Africa.
Earlier this week, Fitch affirmed South Africa’s long-term foreign and local currency Issuer Default Ratings at “BBB” and “BBB+” respectively and affirmed the negative outlook for the country’s economy.
President Jacob Zuma said in May that in spite of economic hardships, South Africa would not back down from the target of achieving a five percent economic growth by 2019.
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