CAPE TOWN, May 11 (Xinhua) -- Egypt has surpassed South Africa as the second largest economy in Africa, said the International Monetary Fund (IMF) in its latest World Economic Outlook.
The IMF said South Africa has been taken over by Egypt because of the depreciation of its currency, the rand.
The IMF also projected that the South African economy would grow by a mere 0.6 percent this year, lower than the 0.9 percent predicted by the South African government.
The global lender said South Africa is now only the third-largest economy on the African continent after Nigeria and Egypt.
Nigerian GDP in US dollar terms surpassed its South African equivalent in 2011. By the end of 2015, Nigeria's GDP was measured at 490 billion U.S. dollars compared to South Africa's estimate of 313 billion dollars
South Africa recorded a decline in its economy during 2012-15 period due to slowdown of real growth (in local currency terms) as well as a depreciation in the value of the rand.
The South African currency weakened from an average of R8.20/on U.S. dollar in 2012 to an average of R12.74/one dollar last year -- that is a depreciation of more than 50 percent.
As a result, the nominal US dollar value of South Africa's gross domestic product declined by an average of almost 7 percent annually over the past four years.
Meanwhile, Egypt's nominal US dollar GDP, however, expanded by an average of 7.5 percent during 2012-15 period. The Egyptian pound's depreciation during 2012-15 period was at a notably slower pace compared to that of the rand.
Since early in 2011, the Central Bank of Egypt (CBE) has tightly managed the pound, resulting in a milder depreciation compared to the free-floating South African currency. This contributed to Egyptian GDP eclipsing its South African counterpart during 2015.