Even though National Treasury ratcheted down the level of its real GDP growth forecasts in the budgets since 2010, it has still tended to over-estimate future real GDP growth. Base effects from the COVID-19 pandemic generated some negative forecast errors for the long term forecasts for the 2019-2021 budgets.
Treasury’s projections for nominal GDP, on the other hand, have been lower than the revised GDP estimates. In large part, this reflects the upward revision to the level of South Africa’s GDP (by 11% in 2020, for example). One consequence of this is that the debt profile has not deteriorated as much as a proportion of GDP as it would otherwise have.
