After a torrid 2019 for the South African economy, characterised by minimal real gross domestic product (GDP) growth, this year was expected to start on shaky ground.
The Bureau for Economic Research (BER) in a short summary of its economic prospects, on Monday said the low GDP growth was compounded by the impact of the return of load-shedding early in January.
“While it is not possible to forecast the frequency and severity of load-shedding, we assume that this will remain an important growth constraint for some time. Therefore, real GDP growth is expected to post only a slight improvement this year.
The BER pointed out that GDP had grown by 0.3% last year, was likely to grow by 0.6% this year and by 1.2% next year.
“Based on our downwardly revised growth forecast through next year, per capita GDP is set for a seventh consecutive yearly decline in 2021,” the BER noted.
After a 0.2% decline of gross fixed capital formation, the BER said a decline of 0.4% was likely for this year and a 1.3% increase was likely for next year.
In terms of gross domestic expenditure, the BER expected a 0.8% increase this year, following a 1.3% increase last year. It is likely to increase by 1.2% next year.