Cape Town, 26 February 2022 (TDI): Amidst ongoing challenges with the COVID-19 pandemic and violent protests, the South African economy has shown tremendous recovery with GDP estimated to increase in the following year, but growth remains unstable and the risk is still high.
According to Finance Minister, Enoch Godongwana GDP is expected to grow by 2.1% in 2022 and by 1.8% over a three-year period. He also added that recovery has remained uneven and that the government should remain cautious.
According to the national treasury, significant risks to the economy’s positive outlook include new COVID-19 variants, rising inflation, and disruptions to the supply chain.
“Commodity prices, which have supported our economic recovery, slowed in the second half of 2021. Also, violent unrest in July and restrictions imposed to manage the third wave of COVID-19 further eroded the gains we made in the first half of the year,” -Finance Minister, Enoch Godongwana.
South Africa was the worst-hit country when it came to COVID. Over 3.6 million cases have been recorded so far with approximately 99,000 deaths. The country also had some of the lowest vaccination rates which further hindered growth.
Additionally, COVID-related restrictions and lockdowns in 2020 and 2021 halted economic activity which caused a spike in unemployment, plunging many citizens into poverty.
The National Treasury also added that structural constraints continue to have adverse effects on the country’s unemployment and poverty. The government currently is at work to rectify these problems. According to the treasury, these reforms are intended to build private-sector confidence and investment, combined with structural reforms and support for small businesses and infrastructure will enable job growth and creation over the long run.
Additional measures to improve the delivery of public infrastructure and attract private capital are also being implemented. The government is stepping up its fight against corruption flowing from reports of the state capture commission while also formulating reforms for climate change.
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