Economists predict that South Africa probably evaded a recession in the first quarter

Introduction

South Africa’s economy is expected to have avoided a recession in the first quarter of 2021, according to economists. The country’s economy has been hit hard by the COVID-19 pandemic, with lockdowns and travel restrictions causing a significant decline in economic activity. However, recent data suggests that the economy may be starting to recover.

Economic Recovery

Economists predict that South Africa’s economy will have grown by around 3.1% in the first quarter of 2021, following a 4.1% contraction in the final quarter of 2020. This growth is largely due to a rebound in the manufacturing and mining sectors, which have been boosted by higher commodity prices and increased demand from China.

The country’s agriculture sector has also performed well, with a bumper crop expected this year due to good rainfall. However, the services sector, which accounts for around 60% of the country’s GDP, is still struggling due to ongoing COVID-19 restrictions.

Challenges Ahead

Despite the positive signs of economic recovery, South Africa still faces significant challenges. The country has a high unemployment rate, with around 32.5% of the population out of work. This has been exacerbated by the pandemic, which has forced many businesses to close and led to widespread job losses.

In addition, South Africa’s public finances are under strain, with the government struggling to balance its budget. The country’s debt-to-GDP ratio is expected to reach 88.9% this year, up from 63.3% in 2019. This has led to concerns about the country’s ability to service its debt and maintain its credit rating.

Conclusion

In conclusion, while South Africa’s economy is showing signs of recovery, there are still significant challenges ahead. The country needs to address its high unemployment rate and find ways to boost economic growth in the services sector. In addition, the government needs to take steps to address its public finances and ensure that it can continue to service its debt.

Despite these challenges, there are reasons to be optimistic about South Africa’s future. The country has a well-educated workforce and abundant natural resources, which could help to drive economic growth in the years ahead. With the right policies and investments, South Africa could emerge from the pandemic stronger and more resilient than ever before

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SA likely avoided first-quarter recession – economists

Better-than-expected mining and manufacturing output contributed to first-quarter growth in South Africa, counteracting the negative effects of slower new-vehicle sales and Eskom’s electricity generation failures, Bloomberg reports. It said a median estimate of seven economists in a Bloomberg survey conducted between 5 and 11 May is for a quarterly GDP expansion of 0.2%, compared with 0.1% forecast in April. Bloomberg adds, however, that the BankservAfrica Economic Transactions Index, an early indicator of economic activity, has signaled the probability of a negative quarter-on-quarter number for the first three months of 2023, after GDP contracted by 1.3% in the final quarter of 2022. Economic growth would have been stronger without Eskom’s load-shedding, implemented on 89 days in the first quarter: the same

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