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Engineering News reports that Fitch Solutions expects growth in SA, which expanded by an estimated 4.8% last year, to slow to only 2.1% in 2022, as the base effects of 2021 fade and longstanding constraints come to the fore once again.
Head of sub-Saharan Africa (SSA) country risk Jane Morley indicated that SA’s unemployment rate, which reached an all-time high of 34.9% in the third quarter of 2021, was also likely to remain elevated this year. There might be limited progress, however, in recreating some of the 325,000 jobs lost in KwaZulu-Natal and Gauteng as a result of the political violence, looting and destruction of property that took place in July last year. Joblessness is expected to remain elevated at around 31.3% in 2022 and act as a substantial constraint on private consumption. Despite government’s commitment to fiscal consolidation and a target of cutting the deficit in 2021/22 to 7.8% of gross domestic product, from 10% in 2020/21, spending would remain elevated in order to sustain the R350-a-month social relief grant, implement repairs following the July riots and to create 440,000 short-term work opportunities. This spending would be supported from increased revenue as a result of surging commodity prices and strong income tax collections from corporates. However, Fitch Solutions expects commodity prices to moderate during 2022.
- Read the full original of the report in the above regard at Engineering News
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