South Africa will sustain average economic growth of 4.91% per year for the next 8 years until 2026, according to a new report by Harvard University’s Center for International Development. This far ahead of other projections, particularly that of the IMF, which only expects 1.5% in 2018 and 1.7% next year. The World Bank sees growth of 1.4% this year.
The report didn't provide any details on South Africa's economic growth case. It still lags behind projections for other African countries including Egypt with 6.63%, Tanzania 6.15%, Mali 5.89% and most notably Uganda with an expected annual economic growth of 7.49%
The ‘New Global Growth Projections’ report, released on Thursday, found that after a decade of commodity and oil-driven economic growth, diversified economies are set to grow faster.
India and Uganda are set to be the fastest growing economies until 2026, with a 7.9% and 7.5% growth annually, respectively.
China will grow slower than India with 4.9% because it “has already realized many of the income gains from a diverse, complex economy,” the report found.
Other first world countries such as the US and UK are set to grow by only 3.07% and 3.69% - with Germany only expect to grow a meagre 2.38%.
The report states that if low-income countries want to experience rapid growth, economic diversification and complexity is a necessity.
“Many low-income countries, including Bangladesh, Venezuela, and Angola have failed to diversify their know how and face low growth prospects,” Sebastian Bustos, a researcher in trade and economic complexity methods, said.
“Others like India, Turkey, and the Philippines have successfully added productive capabilities to enter new sectors and will drive growth over the coming decade.”