SA economy likely to recover to pre-Covid levels by end of 2022 already - Sarb
South Africa's economy will recover to pre-Covid levels by 2022 according to the latest forecast by the Reserve Bank (Sarb).
It's a huge improvement on initial forecasts that predicted this level of recovery only by 2024.
However it could well turn out to have been optimistic in view of the current Covid third wave, says Sarb Deputy Governor Rashaad Kassim.
Speaking at the recent Nedgroup Investments Treasurer’s Conference, Kassim said the pandemic has persisted longer than anyone thought it would.
"We know there will be permanent income loss in some parts of the economy, while other areas are thriving. The challenge for us is to figure out the extent to which are we seeing this reallocation.”
Bruce Whitfield talks to Kassim about the outlook for "accelerated" economic recovery.
If you do the maths and say 'we're at -7% in 2020'... it's only really towards the end of 2022 that you're at pre-Covid levels. That forecast was based on all the current information we have and we made some assumptions that there will be some setbacks as the economy recovers and some uncertainty around the vaccine...Rashaad Kassim, Deputy Governor - SA Reserve Bank
The information we don't have is the extent of the lockdown and whether there will be a lockdown that's more severe... one would then have to revisit the forecast for the economy.Rashaad Kassim, Deputy Governor - SA Reserve Bank
Kassim emphasizes that South Africa has seen a series of important, beneficial policy measures.
We took this massive cut in the interest rate - 300 basis points, give or take. Those effects will be seen now. You don't cut the interest rate and see a sudden impact... It takes 12-18 months.Rashaad Kassim, Deputy Governor - SA Reserve Bank
So, notwithstanding the uncertainty around the severity of the lockdown, some of these stimulus measures are kicking in... and we have been surprised at how some sectors have come up nicely...Rashaad Kassim, Deputy Governor - SA Reserve Bank
Listen to the discussion of both internal and external factors that are shaping South Africa's economic recovery:
This article first appeared on CapeTalk : SA economy likely to recover to pre-Covid levels by end of 2022 already - Sarb
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