Prof Raymond Parsons from the Business School of the North-West University (NWU) says South Africa must urgently capitalise on the economic “rebound” this year to move its economy into more sustainable job-rich growth territory in the period ahead.

“The widely expected official confirmation from StatsSA that the South African economy experienced a -7% GDP growth rate in 2020 aligns with most other recent authoritative assessments of the economic damage the country suffered from the drastic pandemic lockdown last year.”

Prof Parsons says the negative growth figure for 2020 as a whole again demonstrates how much economic ground was lost last year in terms of widespread business failures, huge job losses and significant shrinkage in disposable income.

“Fortunately, the economic news in 2021 is now better. High-frequency data suggests that a strong recovery is underway this year, in tandem with South Africa’s lockdown exit strategy, which is at present reduced to Level 1.”

He says on the health front there is the heightened prospect of vaccines being increasingly “weaponised” against Covid-19 through vaccination as the rest of the year unfolds. “Much will, of course, revolve around the pace and scale of the vaccine roll-out.”

According to Prof Parsons, both the positive global and domestic economic trends therefore predicate an overall “rebound” in the South African economy this year, albeit off a low base.

“On present evidence this economic ‘rebound’ could amount to about 3% growth in 2021 as a whole, which will permeate most business sectors as the recovery proceeds.

“However, we need to acknowledge there is still a long way to go to restore national output and employment to their pre-pandemic levels. Several uncertainties still exist.”

Prof Parsons says the improved short-term economic outlook is therefore what South Africa must now visibly build on to move its economy into more sustainable job-rich growth territory in the period ahead.