Abstract
South Africa’s policy response to the crisis should to some extent help contain the contraction. Nevertheless, the recovery is likely to be slow and hesitant.
Highlights
AS THE GLOBAL CRISIS UNFOLDED during 2008, it initially appeared as if South Africa, along with other emerging market economies, would be relatively unaffected
Consensus forecasts at the time indicated that growth was expected to average around 3.5 percent in 2008 and 2009, before returning to rates of around 5 percent in 2010. This slow-down was due in part to emerging electricity supply constraints and a tightening of South Africa’s monetary policy stance
COSATU (Confederation of South African Trade Unions) members march through the streets of Durban to protest against food, electricity and fuel hikes
Summary
AS THE GLOBAL CRISIS UNFOLDED during 2008, it initially appeared as if South Africa, along with other emerging market economies, would be relatively unaffected. During 2008 the domestic economy was beginning to show signs of moderating, after 5 years of growth of some 5 percent or more. Consensus forecasts at the time indicated that growth was expected to average around 3.5 percent in 2008 and 2009, before returning to rates of around 5 percent in 2010.
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