Category - Ephrem Habtemichael REDDA

The purpose of this study is firstly to assess the impact of the Covid-19 pandemic on the South African economy and secondly, to explore the recovery prospects in the aftermath of the pandemic. The key macroeconomic variables include GDP, debt-to-GDP ratio and budget deficit/surplus. Publicly available secondary data with a time span from 2000 to 2022 are utilised. The study adopted a descriptive research design and conducted quantitative analyses. The results show that the biggest gap between government revenue and expenditure was recorded in 2020, as evidenced by the 10% of the budget deficit. The results also indicate that the debt-to-GDP ratio is way above the 60% threshold with a steeper positive slope, coupled with less encouraging economic growth, as evidenced by low GDP projections. Fiscal sustainability requires keeping the debt-to-GDP ratio in check over the medium term by limiting government expenditures and stimulating investment.