Finance Minister Tito Mboweni revealed in his optimistic Medium Term Budget Speech before parliament on Wednesday, that the economy is forecast to continue expanding in 2022 and 2023 by 1,7% and 1,5% respectively.  

This predicts a 2,2% average growth over the next three years. Mboweni says it looks like there will be a strong rebound in the next quarter of the financial year, according to Treasury’s economic data. The Finance Minister explains that Treasury will be fast-tracking the implementation of structural economic reform. This process will be led by Deputy Finance Minister, David Masondo.  

“A technical team headed by Dr Sean Phillips, will draw on expertise and capacities from the private sector and the public sector as well. This will ensure that implementation is well-coordinated, sequenced and timeous. The Presidency will be very much involved in the process, so that they can help us drive the programme,” says Mboweni.

In the second quarter of 2020, Statistics South Africa (StatsSA) provided a bleak picture of the financial impact of the coronavirus pandemic and the resulting lockdown have had on the country’s already challenged economy. South Africa’s economy contracted by an annualised 51% in the second quarter of 2020 which includes the months of April, May and June, plunging an already weak economy into further recession. The fall marked the fourth consecutive decline in the quarterly GDP since last year. Agriculture was the only industry spared in what has been coined, the ‘pandemic quarter’. Roughly 2,2 million jobs were lost in the same period.

When the lockdown came into effect on 27 March, restaurants, bars, popular takeaway outlets, transport services like airplanes, rail and the tourism industry as a whole came to a grinding halt. It is because of this that household spending fell by almost 50% in the second quarter of 2020. Despite this communication and education spending – data usage in particular increased, with citizens now forced to work from home and continue schooling online.  The controversial bans on alcohol, tobacco, and narcotics resulted in a 92,4% decline during the aforementioned quarter. As already mentioned, almost all industries - apart from agriculture  - experienced a decline in activity. 

Stats SA reveals that there was an increase in the export of maize, citrus fruits and pecan nuts, which contributed to the industry rising by 15,1%. Furthermore, the public’s peculiar interest in baking during lockdown also contributed to the rise. There was a high demand for eggs, with Farmer’s Weekly reporting that egg sales, rose by between 50% and 60% during lockdown.

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