Home Tags Economic growth
Tag: economic growth
The South African economy, like many emerging and developing economies, has high levels of poverty. As with many such countries, there are three primary objectives to reducing poverty, unemployment and inequity. These three objectives take precedence over almost all other goals.
As if the threat of a large-scale outbreak of an infectious disease isn’t enough to worry about, coronavirus has financial implications too. You might have read about the virtual shutdown of industries in some parts of the world and large falls in global stock markets and in the price of commodities such as oil.
It is no secret that entrepreneurship and business creation is the lifeblood of economic growth and innovation. Research out of the United States by the Kauffman Foundation, for example, underscored that entrepreneurship is integral to job creation and economic progress.
Despite the country falling into recession, coupled with a dim economic outlook, it is not all doom and gloom for small businesses. For many small businesses the outlook for the year ahead seems bleak due to a lower forecast for economic growth globally, challenging local trading conditions owing to inconsistent power supply, currency volatility and rising operating costs, amongst several factors. However, opportunities still exist for SMEs who are agile.
With severely limited fiscal space, planned economic reforms need to be fast-tracked. South Africa is in a grip of panic over the impact of the coronavirus disease 2019 (COVID-19). The situation prompted an extraordinary address to the nation by President Cyril Ramaphosa on the evening of March 15. Apart from very real human health concerns, he commented that the outlook for the local economy – already on a weak footing heading into 2020 – is a big headache. Economic growth forecasts have been cut over the past few weeks as forecasters realise that the impact of the pandemic will be larger than previously thought. This begs the question: how will local authorities respond?
According to the latest Employment Outlook Survey, South African employers report limited hiring intentions for the second quarter of 2020. While 8% of employers forecast an increase in payrolls, 5% anticipate a decrease and 85% expect to make no changes. Once the data is adjusted to allow for seasonal variation, the overall outlook for South Africa stands at +2%, unchanged from the previous quarter.
Markets are walking on eggshells as the outbreak of coronavirus disease (COVID-19), first reported from Wuhan, China in late December 2019, is wreaking economic havoc. Data from the world’s second largest economy shows a plunge in business activity in the last month, including massive declines in passenger traffic, electricity generation, shipping volumes and real estate transactions.
Budget statements have in recent years perennially made downward revisions in economic growth projections. Disappointing growth outcomes compared to official forecasts is partly attributed to the inability to implement planned structural reforms that would have delivered improved growth outcomes.