Country Economic Forecasts > South Africa

South Africa: Strong Q3 GDP recovery but credit rating downgrades reflect concerning outlook

The latest data for Q3 shows a stronger recovery than previously expected, prompting an upward revision to our GDP forecasts. We now expect an 8.4% GDP contraction in 2020 compared with a previous forecast of -8.9%. The recovery will gain momentum in 2021 resulting in a 4.2% GDP growth rate next year. The government’s recovery plan is premised on a considerable rise in private investment, which, in turn, will be stimulated by economic policy reforms. Progress on the latter has disappointed and fiscal constraints mean that government will not be able to fund the investment gap.

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