A Harvard University report is predicting that South Africa will sustain up to 4.91% economic growth for the next eight years. According to the report, countries with a more diversified economy are set to grow faster. Harvard University’s Center for International Development is far ahead of other projections, particularly the IMF, which expects 1.5% in 2018 and 1.7% in 2019.The World Bank, on the other hand, only sees growth of 1.4% this year. The report has not provided any details on how South Africa will achieve its economic growth potential.
South Africa still lags behind other African countries, such as 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, which was 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 predicted to be the fastest growing economies until 2026, with 7.9% and 7.5% annual growth respectively. China will grow slower than India with 4.9% because it “has already realised 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% respectively, with Germany expected to grow by a mere 2.38%.
According to the report, if low-income countries want to experience rapid growth, and economic diversification, complexity is a necessity. “Many low-income countries, including Bangladesh, Venezuela, and Angola have failed to diversify their knowhow and face low growth prospects,” said Sebastian Bustos, a researcher in trade and economic complexity methods. “Others, like India, Turkey and the Philippines have successfully added productive capabilities to enter new sectors and will drive growth over the coming decade.”