Standard Bank Group chief executive Sim Tshabalala is “cautiously optimistic” about South Africa’s economic outlook for 2020.<\/p>\n
Speaking at a Deloitte presentation on Thursday (30 January), Tshabalala said that “it\u2019s likely that 2020 will be a bit better than 2019”.<\/p>\n
“World output growth is forecast to accelerate from 2.9% last year to 3.3% this year, which is actually quite a big improvement in percentage terms,” he said.<\/p>\n
“The US economy will probably slow down slightly \u2013 but not enough to cause contagion.<\/p>\n
“Both the UK and the EU should benefit slightly from reduced uncertainty \u2013 now that Brexit is irreversible, and seems as if it will end up as a fairly \u2018soft\u2019 exit from the EU. The recovery in Europe will be positive for sub-Saharan Africa.”<\/p>\n
Things are less optimistic for the South African economy, which is forecast to grow only 0.8% this year \u2013 up from 0.4% in 2019, he said.<\/p>\n
“The Reserve Bank, one should say, is somewhat more optimistic, forecasting 1.2%. Either way, this is not a good outlook.<\/p>\n
“Unless things change quickly, South Africa will suffer another year of falling per capita income and rising unemployment.”<\/p>\n
The upside<\/strong><\/p>\n However, Tshabalala said it is definitely possible to imagine an ‘upside scenario’ for South Africa.<\/p>\n Among other changes and reforms he said that this would include:<\/p>\n “According to the National Treasury\u2019s modelling, if this kind of scenario played out, South Africa might be able to grow about one percentage point faster \u2013 taking us from roughly 1% to roughly 2% by the end of the year,” Tshabalala said.<\/p>\n “Will this scenario happen? We will just have to wait and see. But the early signs seem quite positive.<\/p>\n “The political barriers to achieving some of these reforms don\u2019t seem insurmountable, so I\u2019m mildly optimistic that South Africa might grow a bit faster than predicted in 2020.”<\/p>\n Tshabalala warned that short-term economic forecasts are a lot like weather forecasts for the next day or two.<\/p>\n “There\u2019s not a lot you can do \u2013 except remember to bring your umbrella.”<\/p>\n However, he said that he is generally more optimistic about South Africa in the longer term.<\/p>\n “People can\u2019t do much about tomorrow\u2019s weather. But \u2013 as almost everyone now accepts – we actually can do a lot to affect the planet\u2019s climate – both for good and for ill.<\/p>\n “Similarly, people, firms and even governments can\u2019t do much about short term economic conditions. But we can do a lot about the underlying forces that determine the long-term rate and pattern of economic growth.”<\/p>\n\n
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