Other scenarios in this study show that if the investment initiatives contained in the government’s strategy come to fruition, a potential output growth rate of over 6 per cent can indeed be achieved and sustained. An important component of the future growth scenario is the availability of finance.
South Africa has been running current account deficits in the recent past, and will therefore continue to be reliant on non-resident inflows to finance the investment-savings gap. In the past few years, these deficits have been more than financed by capital inflows which, in turn, are being attracted by the improved growth prospects in the economy.