JOHANNESBURG, Dec 10 (Reuters) – South Africa’s economy is set to grow by just 2% in 2022, less than half the pace seen this year, as consumers rein in spending and electricity constraints dampen exports, a Reuters poll showed on Friday.

In the survey conducted Dec. 6-9, economists forecast South Africa’s gross domestic product will expand by 2.0% next year and by 2.2% in 2023, according to median estimates, slowing from an estimated 5.0% growth this year. Quarterly projections will likely bump along around 1% for most of next year.

Omicron, the new coronavirus variant, is also expected to put a drag on tourism. Tough lockdown restrictions imposed last year hammered tourism, with businesses closing and shedding thousands of hospitality jobs, before the curbs were eased earlier this year.

“Softer global demand, lower international commodity prices and persistent domestic power outages are expected to curtail exports,” said Johannes Khosa, an economist at Nedbank.

South African power utility Eskom has been implementing scheduled power cuts due to frequent failures of units at its coal plants. Currently out of its roughly 46,000 megawatt (MW) nominal capacity, more than 21,000 MW is offline.

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“Budget constraints will continue to subdue government spending, while high unemployment, rising inflation on essentials and tighter monetary policy will slow growth in consumer spending,” added Khosa.

Khosa said that fixed investment – buying of new capital equipment to scale up production – is forecast to improve, but will still be undermined by electricity shortages, transport inefficiencies, high production costs and slow progress with structural reforms.

Inflation is expected to average 4.6% in 2022 and 4.2% in 2023, according to the poll and compared to an estimated 4.5% this year. That is roughly in the 3%-6% comfort range for the South African Reserve Bank.

After unexpectedly lifting its benchmark interest rate last month by 25 basis points to 3.75% – in a close call decision – the SARB is expected to further tighten policy but at a slightly slower pace than forecast in a similar poll just a month ago.

A cumulative 75 basis points of rises are forecast in the latest poll, starting with 25 basis points either in January or March, a pause in May, followed by a hike either in July or September and a final move up in November.

Last month, the SARB was expected to hike rates in each of the first three quarters of next year by 25 basis points each and then pause in the last meeting of 2022 before hiking again, either in January or March 2023, to an eventual 4.50%.

(Reporting by Vuyani Ndaba; Editing by Susan Fenton)