Southern Africa economic outlook 2021
Assuming the COVID-19 pandemic ends or that successful vaccination programs are implemented, Southern Africa is projected to grow 3.2 percent in 2021 and 2.4 percent in 2022. But this recovery will be inadequate given the region’s estimated 6.3 percent contraction in 2020. Slow growth in South Africa—the region’s largest economy—has meant reduced positive externalities for the region’s other countries, which supply inputs to and demand manufactured and processed goods from South Africa. That said, regional inflation is expected to moderate from an estimated 14.2 percent in 2020 to 9.4 percent in 2021 and 6.5 percent in 2022. More stable prices will improve the region’s growth prospects. The region’s recovery hinges on how COVID-19 evolves and the policies that countries adopt. Though vaccination is considered the surest way to achieve herd immunity at minimal economic and human cost, Southern Africa’s vaccination levels lag those of other developing regions, compromising its ability to reach herd immunity soon. Mauritius leads in vaccinations, with 16 percent of the population fully vaccinated at the start of June 2021, followed by São Tomé & Príncipe at 4 percent and Botswana and Zimbabwe at around 3 percent.