Cape Town – South Africa’s new finance minister on Thursday forecast the economy will this year rebound with 5.1% growth, after a record pandemic contraction.
Delivering his maiden mid-term budget statement on Thursday, minister Enoch Godongwana said the economy had recovered faster than expected during the first half of this year.
“We now expect the South African economy to grow by 5.1% in 2021, from a 6.4% contraction in 2020,” Godongwana told parliament.
A strict lockdown imposed in March last year brought most economic activity to a standstill in the continent’s most industrialised country.
Rolling power cuts forced by ageing and poorly designed power plants have added to the economic woes.
“Over the next three years, the growth of the local economy is expected to average 1.7 percent, reflecting some structural weaknesses such as inadequate electricity supply,” said the minister.
South Africa was also hit by riots in July with businesses looted and trashed in the two most populous provinces of Gauteng and KwaZulu-Natal.
The unrest “reminds us that crime continues to be a blight on our society,” said the minister. “It undermines confidence in our recovery and hinders our long-term economic development.”
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