Downward revision due
THE ECONOMY OF Swaziland, arguably South Africa’s most beautiful neighbour, recorded a modest but useful improvement in growth last year. That’s the conclusion of the annual report from the executive board of the International Monetary Fund.
But while that report has only just been officially published, much of the IMF inspection team’s work took place before the eruption of the global financial credit crisis. So the fund’s conclusions – mildly more upbeat than in the previous two years – may now need some downward revision.
Further, Swaziland’s fortunes are heavily linked to those of SA. Given the concerns about clear slowing of business activity in SA, that’s not good news for a small nation vitally linked to this country. The IMF says: “Growth in Swaziland recovered moderately in 2007 to 3,5%, but inflation escalated into double digits, initially owing to high food and fuel prices.” Well, that latter problem has hit almost every country.
However, the IMF adds: “Sustained high rates of growth remain elusive, clouded by a low fixed investment climate, the slow pace of economic reforms, deterioration of preferential treatment of Swaziland’s main exports and rising financial sector vulnerabilities.” The report comments: “The years of persistently low growth have led to high unemployment and rising poverty, made worse by the rising prevalence of Aids.”