Pedestrians wearing face masks walk on the seaside in Cape Town, South Africa, Dec. 5, 2021.Photo:Xinhua

South Africa's economy has rebounded after COVID-19, the IMF said Wednesday while predicting slower growth than the government's forecast with a "lackluster" mid-term outlook.

While the country's finance ministry predicts the economy will grow by 5.1 percent in 2021, the International Monetary Fund said it expects growth to be 4.6 percent.

"The recovery was also supported by external factors, such as favorable commodity prices and benign financial conditions, which are likely temporary," the IMF said.

South Africa's economy contracted 6.4 percent in 2020, when a strict lockdown brought most economic activity to a standstill in the continent's most industrialized country.

Rolling power cuts forced by aging and poorly designed power plants have added to the economic woes.

Riots in July also spooked investors, as businesses were looted and trashed in the two most populous provinces of Gauteng and KwaZulu-Natal.

"More alarmingly, the rebound has not decreased the unemployment rate amid deteriorating confidence [exacerbated by the July social unrest episode], anemic private-sector investment, and weak credit extension," the IMF said.

"Staff therefore projects a lackluster medium-term outlook, with growth averaging 1.4 percent per annum," it added.

The IMF said investors were put off by South Africa's unreliable electricity, telecoms and transportation. 

It also called for more flexibility in the labor market, improved education, and strengthened anti-corruption efforts.

AFP