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What is the potential growth rate of the South African economy? Given the various constraints on growth, including a dysfunctional school system, insufficient electricity provision, infrastructure backlogs and policy uncertainty, to name but a few, what is a realistically attainable rate of growth? In this research note, various methodologies are employed in estimating the potential growth rate of the South African economy. Results show that the potential growth rate has dropped significantly after the Global Financial Crisis. Large-scale structural reforms in both the product and labour markets are required in order to lift the economy to a higher, yet sustainable, growth path.
