Policy Paper 20

This paper considers a range of evidence surrounding prospects of sustainable growth in South Africa. While the economic performance of South Africa during the course of the last three decades of the twentieth century was the cause of considerable concern, more recent evidence has been the source of more optimistic assessments of the prospect of future welfare improvements. Consideration of the evidence presented in Figure 1 lends support to such optimism. After the long period of deceleration in growth, between 1970 and 1995, from 1995 through to the late 2000s growth has not only returned to positive territory in both real aggregate and per capita terms, but the trend in growth has been positive. This indicates that the rising growth performance of the economy has been reasonably sustained. The impact on GDP per capita has also been such that the long-term downward trend in growth, from approximately 1980, reversed. The only countervailing evidence is the decline in growth due to the financial crisis of 2007/8.