The biggest risks to South Africa right now: economists

South Africa’s GDP results for Q1 2021 are positive, with the outlook for the rest of the year also relatively encouraging, says economists at Nedbank.

However, a number of local issues threaten to derail the country’s good start to the year, the bank said in a research note on Tuesday (8 June). These include:

  • A lack of reliable and cost-effective electricity supply;
  • Frequent power outages (load shedding);
  • High unemployment;
  • Slow Covid vaccine rollout;
  • Slow implementation of structural reforms.

“From the production side, growth will be driven mainly by mining and manufacturing, buoyed by increased global demand and elevated commodity prices.”

“However, domestic structural issues will continue to undermine the upside. The most damaging constraint remains the lack of reliable and cost-effective electricity.

“Domestic demand will also improve off an extremely low base. Low-interest rates and firmer household finances should drive growth in consumer spending, which will…

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