The outbreak of the COVID-19 pandemic did not only put strain on health systems throughout the world, it also had a severe negative impact on the economy. World output is estimated to have contracted by 3.5 per cent in 2020 according to the International Monetary Fund
(IMF). Their estimations indicate that Advanced Economies contracted by 4.9 per cent while Emerging Market and Developing Economies contracted by 2.4 per cent. This shows how the output of Advanced Economies had a relatively more pronounced reaction to the crisis. Some recovery is expected for 2021 and 2022, with the IMF projecting positive growth for the world output of 5.5 per cent in 2021 and 4.2 per cent in 2022. Advanced Economies are projected to grow by 4.3 per cent in 2021 and 3.1 per cent in 2022, while Emerging Market and Developing Economies are projected to grow by 6.3 per cent in 2021 and 5.0 per cent in 2022. The economy of Sub-Saharan Africa was estimated to have contracted by 2.6 per cent in 2020, while projections indicate that positive growth of 3.2 per cent is expected for 2021 and 3.9 per cent for 2022.

The pandemic also had a significant impact on the economy of the country, with lockdown measures that were necessitated to curb the spread of the virus, limiting certain economic activities. National Treasury indicated that the economy is estimated to have contracted
by 7.2 per cent in 2020. This is slightly better than the 7.8 per cent contraction that was projected in the 2020 Medium Term Budget Policy Statement (MTBPS). The national economy is projected to rebound this year by 3.3 per cent and to record growth of 2.2 per cent in 2022 and 1.6 per cent in 2023. The roll-out of vaccines is expected to play a very important role in saving lives as well as supporting economic recovery.