There are at least five broad pillars on which better economic prospects might be built in 2020 if there is a proactive approach, writes Raymond Parsons
The newly appointed Economic Advisory Council could play an early and and useful consultative role here. Yet there are no miracle recipesThe combination of economic and political developments over the past 12 months in SA has generated particular interest in the outlook for the economy in 2020. What are some of the relevant factors to be taken into account as the next year unfolds? 2019 was the year in which the bad news about the economy outweighed the good.
Indeed, some economists even believe that the SA economy may well have swung into a technical recession again in the second half of 2019. Growth in 2020 is, in any case, likely to be only about 1%, rather less than the 1.4%-1.6% range expected earlier by the SA Reserve Bank and other economists. Growth at these low levels is widely recognised as completely inadequate if SA is to successfully meet the overarching challenges of unemployment, poverty and inequality.
Despite the agenda of remedies proposed by the medium-term budget, they fell far short of preventing strongly escalating public debt trends up to 2022/2023. And as 2019 draws to a close, growth forecasts for the world economy in 2020 have also stabilised at about 3.3%, although downside risks still exist. Global financial markets have finished the year on a high note as the immediate risks of a US-China trade conflict and uncertainties around Brexit have receded. Growth in Sub-Saharan Africa is expected to average about 3.5% in 2020; nonetheless, SA’s domestic economic outlook for 2020 remains a tough and sombre one, with poor growth prospects.
1. A greater sense of urgency is generally required in official decision-making, especially about Eskom
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