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CHAPTER 2: ECONOMIC OUTLOOK
The outlook for developing economies is mixed. GDP growth is projected
to remain resilient in India and in China. A return to moderate economic
growth is expected in Brazil and Russia in 2017, following two
consecutive years of economic contraction.
Table 2.1 Annual percentage change in GDP and consumer price inflation, selected
regions/countries, 2015 – 2017
Region / country
Percentage
World
Average
2010 – 2014
4.0
Advanced economies
2015
1.8
GDP growth1
2016
Average
2017
3.2
3.1
3.4
2.1
1.6
1.8
2010 – 2014
3.9
1.8
2015
Average CPI1
2016
2017
2.8
2.9
3.3
0.3
0.8
1.7
US
2.1
2.6
1.6
2.2
2.0
0.1
1.2
2.3
Euro area
0.7
2.0
1.7
1.5
1.7
0.0
0.3
1.1
UK
1.9
2.2
1.8
1.1
2.9
0.1
0.7
2.5
Japan
1.5
0.5
0.5
0.6
0.4
0.8
-0.2
0.5
5.7
4.0
4.2
4.6
5.7
4.7
4.5
4.4
Emerging markets and
developing countries
Brazil
3.3
-3.8
-3.3
0.5
5.9
9.0
9.0
5.4
Russia
2.8
-3.7
-0.8
1.1
7.0
15.5
7.2
5.0
India
7.3
7.6
7.6
7.6
8.9
4.9
5.5
5.2
China
8.6
6.9
6.6
6.2
3.2
1.4
2.1
2.3
5.3
3.4
1.4
2.9
7.9
7.0
11.3
10.8
2.5
1.3
0.5
1.3
5.3
4.6
6.4
6.1
Sub-Saharan Africa
2
South Africa
1. IMF World Economic Outlook, October 2016
2. National Treasury forecasts
Low interest rates prevailing in the United States, Europe and Japan have
supported continued capital inflows into developing economies. This
stimulus, however, has not translated into higher profitability of nonfinancial firms, more investment, stronger economic activity or more
positive expectations about GDP growth. Productivity growth has slowed
across advanced and emerging economies. Countries that are highly reliant
on foreign savings, such as South Africa, will remain vulnerable to global
financial volatility and rapid capital outflows.
The outlook for sub-Saharan Africa is marked by low commodity prices
and falling export revenues, which have led to foreign-currency shortages.
The 2016 growth forecast for the region has been revised down from
3 per cent in April to 1.4 per cent, with large economies such as Nigeria
and Angola hard hit by low oil prices and disruptions in production. In
contrast, Ethiopia, Kenya and Senegal are expected to record growth rates
of over 5 per cent.
Growth forecast for subSaharan Africa revised
down, with large economies
affected by low oil prices
Slower growth in the region and global trade weakness limit South
Africa’s export potential. Greater economic integration with the rest of the
continent would enable export-orientated South African firms to capitalise
on stronger pockets of growth and increase their share of African trade.
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