The SA Reserve Bank on Wednesday released its bi-annual Monetary Policy Review (MPR), warning that the emergence of new waves of Kovid-19 infections could further negatively affect the economy to herd immunity to the country. Should not reach
The central bank says that the impact on the economy will likely decrease with each new wave, as “the economy adjusts to its new mode of operation and a large proportion of the population develops natural immunity from exposure to the virus”.
“The Serbs assumed that by the end of the second quarter of 2022 about 10% of the population would be vaccinated, by mid-2022 it would gradually increase to 67%,” the MPR states.
The economy of South Africa declined by 7% in 2020 – its fastest contraction since 1920. The contraction was in line with market expectations following the outbreak of coronovirus and subsequent lockdown that was implemented to prevent the spread of the epidemic.
The Serbs have projected a growth rate of 3.8% in 2021, a moderate growth of 2.4% in 2022, and a 2.5% growth rate in 2023. The economy is expected to reach pre-Kovid levels in 2023.
Economic recovery has been uneven across sectors including Serbs, with sectors such as agriculture and mining rebounding to pre-Kovid 19 levels, while sectors such as construction and manufacturing are lagging behind weak demand among other things.
“Unlike all previous recessions, areas recovering from epidemic conditions are uneven, raising the specter of K-shaped recovery,” it said.
Growth in GDP is expected to occur through low interest rates and large-scale vaccination programs. Last year, the Reserve Bank drastically cut rates (275 basis points) against the backdrop of the epidemic. As a result, the repo rate fell to 3.5% and the prime commercial bank lending rate remained below 7%, up from four%.
The cuts reduced the real cost of debt for households and firms, as economic activity also stopped.
In MPR, the Reserve Bank says that the effects of the easing in last year’s policy are still filtering through the economy, with peak effects expected later this year.
“These effects should be expected to be carried through, as the pickup in mortgage applications suggests. Reductions will continue to exist in the system for some time, leading to growth in outside periods.”
Comprehensive vaccination is expected to curb the spread of Kovid-19, which may reduce uncertainty and reduce disruption of economic activities. Interventions in the country’s vaccination rollout have resulted in marriages that can lead to infection.
In January the government suspended the use of the AstraZeneca vaccine from the Serum Institute of India, studies have shown that the first identified virus in South Africa had minimal efficacy in Jabs against the major 501.V2 strain, and which To a large extent it was caused. Second wave of infection.
On Tuesday, the Department of Health announced that it would temporarily suspend the rollout of the Johnson & Johnson (J&J) vaccine after a blood clot found in six patients in the United States who received a single dose of the jab.
Read: South Africa halts J&J vaccine rollout pending investigation
Health Minister Zweli Mkhize, however, hopes that the temporary, voluntary Jammu and Kashmir job suspension will not have a long-term impact on the country’s overall vaccination plans.
The Serb at MPR said: “A more rapid rollout will lead to a return to normalcy”, especially for areas such as travel and tourism. Bringing tourism and transport back to full activity levels will increase the potential growth of the economy (the reverse effect of adverse supply shocks on these). “
During the MRP release, Serb Governor Lestja Kgyengo said the successful rollout of the vaccine would have a positive impact on the recovery of the global economy.
He said, “who is going to protect us … they are getting vaccinated, as you can see when you experience some optimism about the vaccine rollout globally … then we saw That global sentiment also changes, ”he said.
“What you need for the global community is a fast rollout of vaccination so that you can actually gain global herd immunity, because it’s obvious that the virus mutates if you protect some and not others.” . As it mutates it becomes more difficult [to deal with]”