The IMF warned on Wednesday that South Africa is likely to experience stagnation in economic growth this year.
The country’s economic situation has been impacted by a severe electricity crisis that has led to regular power cuts for months. Normally a growth forecast of 0.3% has been announced by the South African central bank for this year.
However, the country’s short-term prospects have worsened, according to the findings of the International Monetary Fund (IMF) after a mission to the country.
The IMF said in a statement that the accumulation of economic and social challenges increases the risk of stagnant economic growth.
GDP contracted by 1.3% in the last quarter of 2022. The country risks a recession if its economy continues to contract in the first quarter of 2023.
The electricity crisis has worsened in South Africa since last year, with scheduled load shedding lasting up to 12 hours a day.