Answer to Question #238240 in Macroeconomics for Precilla

Question

Critically analyse the South Africa ieconomy

Answer 1

South African Economic Analysis.

Following the Covid-19 outbreak, the economy suffered a lot due to lockdown restrictions imposed in the country to minimize its spread. This led to the closure of business activities resulting in a rapid increase in the rate of unemployment due to an increase in the number of lost jobs. However, it has been predicted that there will be a growth of key trading partners of South Africa.

The economy of South Africa was greatly affected by KwaZulu-Natal and Gauteng civil unrest which made the local private industry experience a downturn in business activities. The demand decreased especially during July 2021. The government is said to have spent about R600 billion per annum on containing conflicts and violence.

The energy sector was not left behind, there was a hike in fuel prices increasing the cost of production. consequently, this led to inflated prices of items.

On a positive note, interest rates remained on hold hence benefiting the debtors in different sectors of the economy. The government chipped in packages to support its economy by the growth of about 0.7 percent points.