JOHANNESBURG, South Africa – The 2022/23 National Budget takes place at a time when South Africa, and indeed the world, is emerging from two years of being battered by a pandemic, which has left the country reeling with low growth and high unemployment.
The International Monetary Fund (IMF) now speaks of disrupted global growth as a key feature of the year ahead. The fund has revised global growth downwards by 0,5 percentage points to 4,4% this year. At the same time, the IMF said that South Africa’s economy is expected to grow by 1.9% in 2022, compared with last October’s prediction of 2.2%.
The downward revision is caused by disruption to global supply chains due to Omicron, rising inflation in both advanced and developing economies leading to rising interest rates, record debt levels in parts of the world, and heightened policy uncertainty.
This state of heightened uncertainty should not lead us to inertia and policy paralysis. We have to face the year and decade ahead with determination, decisiveness and a sense of optimism. We cannot afford to be despondent.
The budget thus needs to respond to several critical issues to foster this sense of confidence.