Anyone who thinks the "R" word is a thing of the past might want to look at the scenarios for the economy sketched in last week's Budget Review. The worst-case scenario has SA in recession for the next two years, with budgetary woes and an inability to address Eskom's financial and operational crises causing a fiscal crisis and a ratings downgrade. The next-worst scenario is hardly better - near-zero economic growth as Eskom load-shedding stretches out over 18 months and exports decline. Bleak as they are, these are not outlandish scenarios - they seem distinctly possible if the government cannot act fast (18 months of load-shedding is what happened in 2014/2015, for example). And the risk is that if they materialise, government finances could end up in even worse shape than last week's budget numbers forecast. On the upside, the best-case scenario has the economy growing at just over 2% this year, rising to just under 3% in two years' time, as "short-term reforms outlined in the 20...

BL Premium

This article is reserved for our subscribers.

A subscription helps you enjoy the best of our business content every day along with benefits such as exclusive Financial Times articles, Morningstar financial data, and digital access to the Sunday Times and Times Select.

Already subscribed? Simply sign in below.



Questions or problems? Email helpdesk@businesslive.co.za or call 0860 52 52 00.