Recent developments suggest that South Africa is running the risk of not fully participating in the widely expected vaccine-induced global growth acceleration in the latter stages of the year, says the Bureau for Economic Research (BER).
In a research note on Monday (11 Janaury), the BER said that there is no longer any doubt that Covid-19 will come in waves and that the country will be impacted numerous times in 2021.
“As a result, countries who find themselves at the back of the queue for vaccines face an almost inevitable damaging third, and potentially fourth wave of the virus,” it said.
“While local exports should benefit from an expected, much-improved global economy and likely heightened global risk appetite as the global recovery gathers momentum, South African consumer spending and non-energy private sector fixed investment may remain subdued through 2021.”
The BER said that there is also a risk that investors will start to distinguish between emerging markets that are rolling out mass inoculation programmes, and those that are lagging on this front, and at the same time lack the fiscal resources to support economies through further lockdowns.
“On current evidence, South Africa scores badly on both fronts,” it said. In addition, given the latest Covid-19 stats in South Africa, the current adjusted level 3 lockdown restrictions could be extended beyond the initial date of 15 January.
“Throw the persistent risk of load shedding in the mix and there are numerous downside risks to our current forecast of 3.5% real GDP growth for 2021.”
Government is set to make an announcement on South Africa’s lockdown restrictions this week, as the country continues to battle with a second wave of Covid-19 cases.
South Africa moved to an adjusted level 3 lockdown on 28 December, including further restrictions on the sale of alcohol, a stricter curfew and limits on gatherings.
In his announcement at the end of December, president Cyril Ramaphosa said that these level 3 restrictions will remain in place until 15 January (Friday) at which time they will be reviewed based on the Covid-19 situation in the country.
On Sunday (10 January), South Africa reported 17,421 new cases, taking the total reported to 1,231,597. Deaths have reached 33,163 (a daily increase of 339), while recoveries have climbed to 966,368, leaving the country with a balance of 232,066 active cases.