South Africa could see zero economic growth this year, the International Monetary Fund (IMF) warned yesterday, attributing this stagnation to the electricity crisis that has been causing regular cuts for months.

In January, South Africa's central bank announced a Gross Domestic Product (GDP) growth forecast of 0.3% for this year, compared to 2% in 2022.

The IMF's conclusions following a mission to the country indicate, however, that the short-term outlook has deteriorated and "real GDP growth is expected to decelerate sharply to 0.1% in 2023, mainly due to a significant increase in the intensity of power cuts".

"South Africa's economic and social challenges are mounting, posing a risk of stagnation in the midst of an unprecedented energy crisis," the IMF warned in a statement, quoted by Lusa.

GDP contracted by 1.3% in the last quarter of 2022 and the country's economy could end this first quarter of 2023 also contracting.

The electricity crisis has worsened in South Africa since last year, with scheduled load shedding sometimes lasting up to 12 hours a day.

State-owned Eskom is unable to produce enough for South Africa's 60 million inhabitants, with aging and poorly maintained power stations.

The cuts cost more than 50 million dollars (45.98 million euros) a day in lost production, according to estimates by the Ministry of Energy.

The government is aware of "most of the risks to economic growth and is working on measures to address them," the ministry said in a statement.

In addition to the electricity crisis, the IMF, which ended its mission to the country on March 17, pointed to "increasingly pronounced logistical and infrastructure bottlenecks, a less favorable external environment and climate shocks".

The external risks for economic stagnation include a "deeper and more prolonged global slowdown, a slowdown in commodity prices and a shift in global investor sentiment towards emerging markets," write the IMF staff.

Domestically, they point to "delays in resolving the energy crisis" but also "slower than expected progress or reversal in reforms and policies, including fiscal consolidation, and increased political uncertainty".

South Africa, which is considered to be the continent's largest electricity producer, produces 80% from coal, and also imports 75% of the total output of the Cahora Bassa Hydroelectric Plant (HCB) in Mozambique.