Finance Minister, Enoch Godongwana says South Africa’s economy grew faster than expected in the first half of this year but the momentum taper off due to public violence and looting in July as well as the effects of the coronavirus pandemic.
He was speaking during his first mid-term budget policy speech in Parliament.
Godongwana says Treasury expects real GDP to grow by 5.1% this year – somewhat better than had been anticipated at the beginning of 2021.
He says output is expected to return to pre-COVID levels in 2022, a year earlier than estimated in the February budget.
“In the first half of 2021, the South African economy recovered more quickly than expected, reflecting less stringent COVID-19 restrictions, along with lower interest rates supported by stronger demand and higher commodity prices. We now expect South Africa’s economy to grow 5.1% in 2021 from 6.4% contraction in 2020. The growth of the local economy is expected to average 1.7% reflecting some structural weakness such as inadequate electricity supply.”
2021 Mid-Term Budget Policy Statement