The magazine's latest issue includes an editorial on South Africa entitled "Cry the beloved country", and a report entitled "Over the rainbow".

They both suggest a failure of leadership in South Africa had resulted in the country sliding backwards since democracy was introduced in 1994.

According to the editorial: "Since Mr Mandela retired in 1999, the country has been woefully led," referring to former president Nelson Mandela.

The SAIRR said it was in broad agreement with both articles.

"The institute has read both reports and can say that the data cited by The Economist is broadly accurate."

The institute's deputy CEO, Frans Cronje, said: "The Economist reports will obviously have an impact on investor sentiment. In the short term the impact will be negative and will cause damage to the economy."

However, he predicted the criticism could help South Africa in the long term.

"In the long term, however, it will alert people, in government, the business world, and outside, to the need for urgent policy reform.

"What has happened in the weeks since the Marikana shooting, both in terms of ratings agency downgrades and the latest report from The Economist, is a much-needed correction in opinion about South Africa."

Some 46 people were killed in strike-related violence at Lonmin's platinum mine in Marikana, near Rustenburg, in August and September.

A more realistic understanding of South Africa would lead to a more accurate assessment of its problems, Cronje said.

"Without dramatic shifts in policy it is no longer possible for the current government to meet the demands of actors within South African society," he said.

According to The Economist South Africa was "on the slide both economically and politically".

The editorial points out that the mining sector had been "battered by wildcat strikes, causing the biggest companies to shed thousands of jobs in the face of wage demands and spreading violence".

It said foreign investment was drying up, service delivery protests were "becoming angrier", education was "a disgrace", and inequality had grown.

It admitted the country had made some progress, such as in providing housing and welfare services.

"But the party's [African National Congress's] incompetence and outright corruption are the main causes of South Africa's sad decline."

According to The Economist it was problematic that: "Nearly two decades after apartheid ended, South Africa is becoming a de facto one-party state."