GDP: SA must capitalize on economic 'rebound'

“The widely-expected official confirmation from StatsSA that the SA economy experienced a -7% GDP growth rate in 2020 aligns with most other recent authoritative assessments of the economic damage the country suffered last year from the drastic pandemic lockdown,” says NWU Business School economist Prof Raymond Parsons.

He adds that the negative growth figure for 2020 as a whole again demonstrates how much economic ground was lost last year in terms of widespread business failures, huge job losses and significant shrinkage in disposable income.

“Fortunately, the economic news in 2021 is now better. High frequency data suggest that a strong recovery is underway this year, in tandem with SA’s lockdown exit strategy presently reduced to Level 1. And on the health front there is the heightened prospect of vaccines being increasingly ‘weaponized’ against Covid-19 through vaccination, as the rest of the year unfolds.”

Parsons believes that much will, of course, revolve around the pace and scale of the vaccine rollout.

“Both the positive global and domestic economic trends therefore predicate an overall ‘rebound’ in the SA economy this year, albeit off a low base. On present evidence this economic ‘rebound’ could amount to about 3% growth in 2021 as a whole, which will permeate most business sectors as the recovery proceeds.

“However, we need to acknowledge there is still a long way to go to restore national output and employment to their pre-pandemic levels. Several uncertainties still exist. The improved short-term economic outlook is therefore what SA must now visibly build on to move its economy into more sustainable job-rich growth territory in the period ahead.”

Visit the official COVID-19 government website to stay informed: sacoronavirus.co.za