Economic recovery will take long time, warns economist
Chief economist at Econometrix Azar Jammine says South Africa has a long road ahead as its economy struggles to fully recover from the Covid-19 lockdown.
Jammine's remarks follow the release of the Gross Domestic Product (GDP) for the second quarter, which saw the country's economy shrinking by 0,7%.
The results shows that the size of the economy in the second quarter was smaller than it was before the Covid-19 pandemic.
The devastating floods in KwaZulu-Natal and load shedding were highlighted as the biggest contributors to the decline.
Jammine says while the government has announced measures to solve the country's energy crisis, it will take a while before the economy fully recovers.
"The economy will not recover appropriately either, unless we start seeing the implementations of the reforms that have been announced such as licensing restrictions on renewable energy projects, expansion of private sector investment into improving the availability of ports and rail facility.
“All this are important structural impediments to higher economic growth and unless we see concrete action being taken to address this, we are not likely to see a meaningful recovery in economic growth even in the longer term.
“There are many structural impediments to growth such as corruption, poor levels of education, skills shortages to actually implement infrastructural investment projects. All these impediments need to be overcome if we are to see a meaningful economic recovery and a reduction in unemployment, poverty, and inequality," says Jammine.
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