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The consequences from a fourth wave of coronavirus infections caused by the Omicron strain threatens to derail South Africa’s recovery from its greatest economic recession in nearly three decades.
Bloomberg polled economists, who forecast a 4.9 percent increase in GDP in 2021, compared to an earlier projection of 5.1 percent. The most developed economy in Africa is now anticipated to grow by 2% next year and 2.1 percent in 2023.Following the discovery of Omicron and output falling more than predicted in the third quarter, more than 90 nations slapped travel bans on South Africa ahead of its summer holiday season.
Prior to the emergence of the new strain, the government and central bank forecasted that the economy would grow by 5.1 percent and 5.2 percent this year, respectively.
The pandemic’s progression and ongoing electrical supply problems are still threats to the outlook. Progress on long-awaited structural reforms, which Finance Minister Enoch Godongwana said the government aims to complete by the middle of February, might boost output in the new year.