Macroeconomics of Reconstruction and Recovery: Policy Options Beyond Covid19?

How South Africa lifts itself out of the pandemic-induced macroeconomic crisis is a societal debate with knock-on effects that are likely to last for years if not decades to come. The depth and scale of the macroeconomic contraction (with SA 2020 growth rate expected to average at – 7,5%) will not only cut fiscal resources available for equitable socioeconomic priorities. Recent National Treasury statements also warn of a looming sovereign debt crisis that call for rethinking long-term adjustments in how the state allocates its limited fiscal resources.

What are the implications of a prolonged Covid-19 depression for government’s latest economic crisis response plan (Economic Reconstruction and Recovery Plan) and the longer-term National Development Plan (Vision 2030)? What policy options exist for sustainable and equitable macroeconomic reconstruction and recovery beyond Covid-19?