South Africa is expected to witness a decrease in economic growth in 2022 and 2023. The World Bank’s latest Global Economic Prospects report estimates a dismal 2.1% growth in 2022 followed by 1.5% in 2023. These estimates come after the GDP bounced back to 4.6% last year following a 0.1% growth in 2019 and a fall of -6.4% in 2020.
According to the report, the economic growth of South Africa is expected to return to its pre-pandemic trend having been held back by structural impediments and increased levels of public debt. The key factors seen to be impeding growth include COVID-19 outbreaks, social unrest, and power shortages. The services, tourism, and manufacturing sectors have been adversely affected by the pandemic, while sustained losses to incomes and employment and rising inflation have held back a recovery in consumer spending and slowed down progress on poverty reduction.
Meanwhile, the South African Reserve Bank (SARB) has adopted a more positive outlook with regard to GDP estimates and forecasts. The country’s Monetary Policy Committee (MPC) noted an estimated 5.2% growth in 2021 and forecast 1.7% in 2022, 1.8% in 2023, and 2% in 2024.
Notwithstanding this, other African countries are expected to do much better in terms of growth. Sub-Saharan Africa tracks this data pattern conversely over the same period, with output growing by an estimated 3.5% in 2021 followed by an upturn to 3.6% in 2022 and 3.8% in 2023. Two countries in sub-Saharan Africa are forecast to grow at over 7% this year, with Rwanda at 7.1% and Seychelles at 7.7%. Another three countries in the region are expected to surpass the 9% mark in 2023, with Niger forecast to grow by 9.4%, Senegal by 9.2%, and Mozambique at 9.6%.
Despite the rebound which is largely attributed to commodity prices and an easing of social restrictions, the pandemic has set progress back in terms of poverty reduction and key development goals across the region, reversing more than a decade of gains in per capita income in some countries according to the report. As such, recovery “remains fragile and insufficient to reverse a pandemic-induced increase in poverty and the threat of recurrent COVID-19 outbreaks lingers,” the report concluded.
