COMMUNITY LIVING
BETTER PROSPECTS FOR THE SA ECONOMY
28 F I N A N C I A L F O C U S
IT IS TIME TO PUT COVID-19 AND TALK ABOUT ECONOMIC STAGNATION BEHIND US .
Investors should try to ignore the remaining shortterm noise and risks around infections , lockdowns , unrest and last year ’ s weak economic growth and look toward the medium to longer term . When investing – especially for future wealth or retirement – the short term becomes less important , as we all should invest for longer term returns .
The improved prospects for the South African economy – not only for this year , but also for the medium term — stem from a very supportive global economy , a local economic rebound from last year ’ s slump , an improved policy environment and a very positive February National Budget .
Growth in 2021 could reach 5.6 %, and medium-term growth ( i . e . from 2022 to 2026 ) could average 2.5 % per annum . Although the concerns about the severity of the third wave , the slow rollout of vaccines and concerns about the global commodity prices rising are unlikely to last forever , they are all very valid risks for the local economy .
However , while the restrictions during the third wave clearly hurt the hospitality and alcohol industry , the overall impact on the economy was not as severe as during the hard lockdown of April and May 2020 . The slow vaccine rollout has gained some momentum , and it seems reasonable to expect that a large percentage of the population will likely be vaccinated by the end of 2022 .