Finance minister Tito Mboweni’s medium-term budget policy statement (MTBPS) has in effect cancelled President Cyril Ramaphosa’s reconstruction and recovery plan. If implemented, it will dash hopes of a recovery and prolong SA’s deepest recession in a century. However, there are reasons to believe that the planned austerity measures of R300bn may not be implemented and that the MTBPS might have to be changed.

According to the Treasury’s rosy forecasts, “the economy will only recover to 2019 levels in 2024”. Given that the Treasury’s forecasts have been wrong (and too optimistic) for the past decade and the population will continue to grow, it will take longer than five years for GDP per capita to recover to 2019 levels. With current policies, SA will have a second “lost decade” until 2030. During the first “lost decade”, between 2009 and 2019, GDP per capita did not grow...

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