An outlook of the economy in South Africa for 2021

Standard Bank Chief Economist, Goolam Ballim, reflects on the year that was 2020, and the prospects for 2021.

In South Africa, we forecast GDP growth of 4.5% GDP in 2021; only a partial output recovery following the estimated 7.5% contraction last year. South Africa’s electricity constraint will curb growth in 2021, after shaving around 1 percentage point off growth in each of the last 2 years.

Growth in sub-Saharan Africa is projected to recover only gradually, especially as the region lacks the fiscal resources so prevalent in developed markets. In South Africa, Nigeria and Angola, the region’s larger economies, real GDP is projected to return to pre-crisis levels in 2023, at the earliest.

The global economy will enter a restoration phase in 2021, although recovery will vary by region. Both the US and Europe will experience above-trend growth this year, and China’s strong credit and fiscal impulses will aid global buoyancy. Covid-19 has been “the great accelerator”, accentuating several pre-existing themes.