IMF REVISES ESWATINI GROWTH FORECAST

MBABANE - The International Monetary Fund (IMF) has slightly revised upwards the country’s growth forecast for the year under review.

In its latest World Economic Outlook released this past Tuesday, the growth forecast was revised upwards by 0.5 per cent. The revised outlook is 1.5 per cent. Worth noting is that the forecast is still below that of regional counterparts that include South Africa. The reason for the low growth forecast is said to be the second wave of the COVID-19 pandemic.

Restriction

The country has been under lockdown in early 2021, entailing travel restrictions, a ban on most gatherings except for funerals and restriction on business operating times. This affected both demand and supply. Meanwhile, this publication recently reported that the Gross Domestic Product (GDP) for the year 2020 stood at E65.432 billion. The Real GDP decline was at -1.9 per cent compared to a revised growth of 2.6 per cent realised in 2019. Economist Sanele Sibiya said the major contributors to growth would be how fast the country opened up and restored supply chains.“With the current vaccination drive, we are almost poised to do better than most countries in Africa.

Instability

“There exists a major downside risk in that we are, for the most part, floating in uncertain waters because of the political instability. Holding the political risk constant and given the vaccination drive, the 1.5 per cent compared to last year is plausible,” he said. Sibiya said should vaccines not work as planned; the country could be heading to negative growth yet again.
“Also, if the political equilibrium fails to hold, we will be in trouble,” said Sibiya. Meanwhile, in the outlook, the IMF said Eswatini’s regional counterpart, South Africa’s GDP would now grow by five per cent this year. These figures are up from four per cent previously forecast in July.

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