SA’s economy grew at fastest pace in 14 years in 2021

SA’s economy expanded at its fastest pace in 14 years in 2021, rebounding from a coronavirus-induced contraction the year before.

Gross domestic product (GDP) grew 4.9% after shrinking 6.4% in 2020, according to a report released by Stats SA on Tuesday. The biggest increase since 2007, the expansion beat the 4.8% median estimate of 29 economists in a Bloomberg survey and the National Treasury’s forecast in its annual budget last month.

GDP expanded 1.2% in the three months through to December from the previous quarter, after a revised 1.7% contraction in the prior three months. The growth rate matched the median estimate of 14 economists in a separate Bloomberg survey. GDP grew 1.7% year-on-year in the fourth quarter.

Growth in the fourth quarter was crimped by travel bans just before SA’s summer holiday season splash during a wave of Covid-19 Omicron infections and surging fuel prices.

While the faster rebound in the 2021 number bodes well for SA's return to pre-Covid-19 levels of economic output this year and government’s efforts to rein in high debt, the war in Ukraine is likely to curtail growth going forward. 

Still, the data amplifies calls by National Treasury director-general Dondo Mogajane for government to accelerate structural reforms needed to raise output and create more employment opportunities as SA grapples with an unemployment crisis.

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