SA’s economy is nearly at a standstill – WEF

South Africa ranked 61, down 14 positions, in the World Economic Forum’s (WEF’s) annual competitiveness report, but remains one of sub-Saharan Africa’s most competitive economies.

The 2017-2018 WEF report compares 137 economies against each other and a set of factors which determine their economic productivity. The method looks at 12 pillars of competitiveness. It shows SA has declined steeply in its economic productivity.

According to the report, SA’s economy is nearly at a standstill. The GDP growth forecast is at only 1% in 2017 and 1.2% for 2018.

Growth is being affected by persistently-low international demand for SA’s commodities, while the unemployment rate is currently estimated above 25% and rising. Political uncertainty has decreased the confidence of SA business leaders. Although still relatively good in the African context, the country’s institutional environment (76th), financial markets (44th), and goods market efficiency (54th) are all rated as weaker than 2016.

The Independent Regulatory Board for Auditors CEO Bernard Agulhas said this result requires SA regulators to work together to remedy and re-establish stability in capital and financial markets.

Last year, SA ranked 11 out of 138 economies and scored 5.2 out of seven in financial market development, otherwise known as the eighth pillar of competitiveness. In the 2017-2018 report, SA dropped to 44 out of 137 economies and scored 4.4 in the same sector.