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· The South Africa Reserve Bank (SARB) expects a GDP contraction of 7% in 2020, the highest quantum of decline since
2009.
· The growth is forecast to recover to 3.8% by 2021 and 2.9% in 2022.
· GDP will still be smaller than the levels recorded in 2018 and 2019 due to the base effect, according to SRRB economists.
The South Africa Reserve Bank (SARB) expects a GDP contraction of 7% in 2020, the highest quantum of decline since 2009. The growth is forecast to recover to 3.8% by 2021 and 2.9% in 2022. GDP will still be smaller than the levels recorded in 2018 and 2019 due to the base effect, according to SRRB economists.
An estimated 80% of the economy should be operational under level 3 restrictions. However, smaller businesses, which will continue to be
under great strains, will take time to recover and job losses would continue. While growth in the manufacturing sector may recover after a few quarters, export sector will likely be sluggish because of the disruption cast by the pandemic world-wide.
Experts also doubt about the impact of the stimulus package announced by the government. They opine that the present dilemma of the South African economy stems from several other factors. Since 2009, the economy has been in downswing, to be precise- since the financial meltdown, which refused to retreat from the country, while most of the other leading economies had snapped bonds with recessionary trends, This was followed by massive corruption of Jacob Zuma’s presidency, that took the economy to further depths. The pandemic only added to the already existing trauma..
