The South African economy contracted by 6.4% due to COVID19 related restrictions on trade and movement.

It is expected that for the 2022 fiscal year the economy will bounce back by 4.8 per cent 2022. This is lower than the projected growth of 5.1% from the MTBPS, it also does not return the economy to a pre-pandemic level. The global economy is projected to grow 4.4 per cent in 2022 lower than the 4.9 per cent in the MTBPS.

The growth of the local economy is expected to average 1.8 per cent over the medium term. The South African population is estimated to have grown by 1.24% in 2021 and 1.19% in 2022. In order to see real change in the poverty numbers and unemployment rate, South Africa needs to achieve economic growth levels that are higher than the current projections. 

*IMF:

Global growth is estimated at 5.9 per cent in 2021 and is expected to moderate to 4.4 per cent in 2022.

The baseline incorporates anticipated effects of:

  1. Mobility restrictions,
  2. Border closures, and
  3. Health impacts from the spread of the Omicron variant.

 

*Treasury:

Real GDP is expected to grow by 2.1 per cent in 2022 and average 1.8 per cent over the medium term.

Risks:

  1. Significant risks to the economic outlook include new COVID-19 variants leading to new waves of infection,
  2. continued interruptions in power supply, and
  3. Rising inflation and fiscal risks.