The country’s real Gross Domestic Product (GDP) is expected to grow by an average of 2.1 % in 2022, Finance Minister Enoch Godongwana said on Wednesday.
However, GDP is expected to grow by an average of 1.8 % over a three-year period.
The upward revision comes after the National Treasury had projected the GDP growth to grow at an average of 1.7 % over a two-year period when it tabled its Medium Term Budget Policy Statement (MTBPS) in November last year.
“We have revised our economic growth estimate for 2021 to 4.8%, from 5.1 % at the time of the MTBPS.
“This revision reflects a combination of the impact of changes in the global environment, along with our own unique challenges.
“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,” he said.
Meanwhile, National Treasury said that significant risks to the outlook include the emergence of new COVID‐19 variants in the context of low vaccination levels, rising global inflation, and continued disruptions to power supply.
The National Treasury also said that longstanding structural constraints entrench South Africa’s high levels of poverty and unemployment. Government continues to advance a multifaceted strategy to achieve higher and sustained economic growth rates.
“These reforms are intended to build private‐sector confidence and investment. The combined impact of structural reforms, support for small business and new infrastructure investment will enable higher rates of growth and job creation over the long term.
“Over the next three years, government will introduce additional measures to improve the delivery of public infrastructure and attract private capital,” Treasury said.
In addition, government will over the next three years, devote considerable attention to strengthening the fight against corruption flowing from the reports of the State Capture Commission, cutting red tape for small businesses and strengthening the green transition.
“In line with government’s international and domestic commitments to climate change adaptation and mitigation, the National Treasury plans to pilot a climate budget tagging methodology, which can inform future spending priorities and budget reforms.”
Source: South African Government News Agency