Botha, who was the guest speaker at a business breakfast presented by Church Unlimited on Friday, September 10, told the Mbombela business community that South Africa is on the cusp of a new era of economic prosperity.
This despite the fact that the country entered what is commonly referred to as a technical recession – two successive quarters of negative GDP growth – after GDP growth declined by 0.7% in the second quarter of the year. year. This follows a restated 2.6% contraction in the first quarter.
But Botha is adamant that there is more than one way to define what a recession is.
“Despite various challenges due to an inept government and the Covid-19, GDP at basic prices (GDP at market prices, less taxes and subsidies on products) increased between April and June with 6.6% since the first quarter to reach a new peak of R1. 4t, ”Botha said.
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“In real terms (this neutralizes the effect of inflation) the growth rate is 5.6%. GDP increases to R1.53t after the effect of taxes and subsidies on products has been included in the calculation. This is a new peak and represents a real growth rate (quarter over quarter) of 4.2%, still a very good performance.
Botha, who is known to be more optimistic than other economists, is adamant that the statistics are on his side and that he has reason to be optimistic, despite fierce criticism from his peers.
“I predicted the economy would be fully recovered by the fourth quarter of last year. They laughed at me. But look at the latest GDP figures. Eight out of ten sectors performed better than expected. At least some of my detractors have the decency to apologize whenever my point turns out to be correct. Confidence in agriculture is at an all time high. Construction is clearly not on its knees and retail is showing buyers are back; all good news, and SSA should be reprimanded for not painting the full picture
of the South African economy, ”Botha added.
“In general, the economy has grown very well since the outbreak of the pandemic with exceptions like the hotel industry and restaurants, but the characteristic is certainly not bleak.” According to him, the country is on the right track with President Cyril Ramaphosa at the helm. But he needs more time; nothing will happen overnight.
“Zimbabwe and Venezuela have become failed states because of bad policies. We have to get out of ideologies and come back to pragmatism. We can create jobs for every South African if we implement the right economic policies, and I think Mr Ramaphosa is doing the right thing.
“In the fourth quarter of last year, this economy produced exactly as much as it did in the fourth quarter of 2019. Which isn’t to say all sectors have done well, but we are normalizing this economy,” Botha said.
“I have absolutely no doubt in my mind that our economy is in take-off mode,” he concluded.
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