Many are concerned with downside risks to global potential growth, which would be highly relevant for the trend in the growth outlook in an open economy such as South Africa.
Uncertainty about the longer-term impact of the pandemic may in itself result in lower global capital accumulation, especially at a time when corporate profit rates are declining and global trade, which is historically a driver of investment, is still contracting.4 Indeed, supply concerns experienced at the height of the pandemic – for example, in the procurement of medication or personal protective equipment – may entice authorities to reduce reliance on global value chains, or at least reduce the length in the supply chains and reliance on single suppliers.