A TALE OF VACCINES AND CONSTRAINTS ON GROWTH
The outlook for SA’s economic growth in 2021 hinges on a rapid increase in power generation and urgently needed reforms. The realisation of both is daunting, to say the least.
The battered global economy is expected to begin its long journey to recovery from the impact of Covid-19 next year, provided that ambitious plans to roll out effective vaccines to billions of people stay on track, reducing the threat of renewed restrictions on activity and alleviating fears of infection.
It already looks like the anticipated bounce in 2021 will be weaker than initially envisaged, following second waves of infections – more severe than the first – which are sweeping across leading economies, like the US, Europe, the UK and Japan. There are concerns that a second wave is imminent in SA, given a surge in infections in the Eastern and Western Cape at the time of going to print.
China has the most promising outlook – it is the only major economy that grew in 2020, because the government’s early and tight control of the virus was effective enough to allow lockdowns to be lifted months ago. Even so, it is expected to have expanded by just over 2%, its slowest pace since 1976.
In developing economies, the inoculation of millions of people will lag those of advanced economies, as they will have more limited access to vaccines and are less capable of putting in place the logistics of transportation and storage in cold conditions. The distribution will also be more challenging, particularly in rural areas.
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