South Africa: Five Key Factors That Will Affect South Africa's Economy and Your Wallet This Year

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analysis

South Africa's fragile economy is already off to a stumbling start in 2021. The economy began 2020 mired in recession and the hard lockdown imposed in late March triggered a contraction of 51% on an annualised basis in the second quarter.

First appeared in Daily Maverick 168

The relaxation of lockdown regulations saw a 66% rebound in the third quarter (Q3), but a lot of ground remains lost. Estimates generally peg the 2020 contraction at between 8% and 10%. With renewed lockdown measures, the return of load shedding, mounting debt and shattered confidence, the outlook for 2021, with a few exceptions, is bleak.

Here are five key factors to look out for this year that will have an impact on the economy, your bank account and your best-laid plans:

The pandemic

Covid-19 has usurped Eskom's role as the chief risk to the economy. Eskom would have had to implode to pull off a 51% gross domestic product (GDP) collapse on its own.

London-based consultancy Capital Economics reckons the renewed lockdown measures imposed late in December shut down about 20% of the economy, shaving 0.5% of potential growth off this year. If these get renewed or if more stringent regulations are...

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