Eskom drama sees World Bank slashing SA's economic growth prediction

Eskom drama sees World Bank slashing SA's economic growth prediction

- 2020 is just a few days old but South Africa's economic situation is already looking bleak

- The World Bank has cut the nation's growth forecast to below 1% for this year

- Eskom and continued load-shedding have taken the majority of the blame for this review

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The first key institution has slashed South Africa's hopes for economic growth in 2020.

Bloomberg reports that the World Bank has estimated the country will experience less than 1% growth this year.

Concerns over electricity supply have seen the growth rate prediction slumping to only 0.9% with its outlook for the economy dubbed 'markedly weaker' in the face of renewed power outages.

Electricity supply and infrastructure setbacks have seen domestic growth inhibited, while weak international conditions are weighing on exports.

Briefly.co.za reported that South Africa was saved from load-shedding over the festive season by factories closing for the holidays.

READ ALSO: Cash flow woes: Ramaphosa reportedly asked to cover ANC salaries

While the nation managed to hold off the power cuts, their return this week has already started causing damage to the country.

Eskom's desperate situation, marked by a massive debt burden and maintenance failures, has seen Mzansi stuck in a cycle of less than 2% growth for the past seven years.

The Goldman Sachs Group Inc has labelled the embattled state-owned entity as one of the largest threats to the economy and this claim has already fulfilled itself.

If President Cyril Ramaphosa's administration is able to implement structural reform and eliminate policy uncertainty, the World Bank's prediction sees growth averaging 1.4% next year.

However, the ANC is battling its own financial issues, according to insiders. Sources within the party claim that Ramaphosa was asked to cover the party's salaries this month.

This comes after Luthuli House employees complained about a two-week delay in their December wage payments.

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Source: Briefly.co.za

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