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2021 off to a bad start in SA, limits to regional trade pact

The near-term outlook for South Africa has taken a turn for the worse in recent weeks as virus containment measures have been tightened to try to curb a second wave of COVID-19. Mounting pressure on the healthcare system, combined with limited access to vaccines, means that the risks are skewed towards even tighter measures over the coming months. We expect the Reserve Bank to respond with an interest rate cut later this month. Meanwhile, high hopes surrounding the African Continental Free Trade Area, which came into force at the start of this year, are likely to end in disappointment.

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