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South Africa Economic Outlook 2021

Local private sector activity expanded during the first five months of 2021. Alongside improved consumer sentiment, data from PwC reports and other sources also reflect an increase in spending on durable household goods, digital media and entertainment, as well as hotels and restaurants.

However, private sector output declined in June due to the reintroduction of stricter lockdown measures – to level 3 on June 16 and level 4 from June 28. During the second week of July, the country also experienced unrest in Gauteng and KwaZulu-Natal. These events and their economic impacts overlapped with a peak in the third wave of COVID-19 infections.  

View of Cape Town buildings Im

In this edition

A consumer-led recovery?

PwC’s South African Economic Outlook 2021 (July) report updates our different forward-looking scenarios for the South African economy in 2021-2022. Our economic forecasts are influenced by assumptions about the adverse impact of COVID-19 lockdown restrictions, electricity load-shedding and unrest on business and consumer activity, combined with the positive impact of fiscal and monetary policy support.

Key content in this edition includes:

  • PwC’s June 2021 Global Consumer Insights Pulse Survey found that 41% of South Africans were optimistic about the economy – up from 36% in March.
  • South African consumers are expected to spend 9.8% more on digital media and entertainment this year alongside an increase in stay-at-home activity.
  • We expect the South African economy to grow by 2.3% this year. This number could have been closer to 4.6% were it not for the negative impact of electricity load-shedding.
  • Unrest in Gauteng and KwaZulu-Natal during the second week of July could reduce GDP growth by 0.4 percentage points this year and has put up to 50,000 jobs at risk.
  • With inflation at comfortable levels and economic growth under pressure, the South African Reserve Bank (SARB) is unlikely to change interest rates this year.

This document provides forecasts for economic and employment growth, the unemployment rate, consumer price inflation, interest rates and the exchange rate. The report and associated projections are updated on a monthly basis - thought revisions could occur more frequently based on major economic data releases or key influential events. This edition is up to date as of 13 July 2021.


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South Africa Economic Outlook 2021 (July) - A cosumer-led recovery?


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Lullu Krugel

Lullu Krugel

Partner and Chief Economist, PwC South Africa

Tel: +27 (0) 11 797 4929