Various factors have been hypothesized to influence the performance of an economy. Such factors include availability of natural resources, labor, capital i.e., physical and human capital, technology, high investment rates, and entrepreneurship (Upreti, 2015). According to (Wijaya, 2017), high economic growth, as well as the underlying country’s sustainability, make up the main conditions of sustainability economic country development. Factors such as large-scale pandemics have been studied in relation to among other effects, their role in the disruption of economies through ripple effects occurring as a result of the shocks of “…simultaneous disruptions to both supply and demand in an interconnected world economy” (Chudik, et al., 2020).
A country’s gross domestic product (GDP) has been proposed by various studies as an indicator of economic growth
The ongoing Corona virus pandemic is arguably one of the most widespread pandemics of modern times which according to various studies while marring the global economy with the deepest recession since the end of World War II (Yeyati & Filippini, 2021), has had its silver linings such as a boost to productivity growth (Carlsson-Szlezak & Swartz, 2021). Mixed feelings.
Since the onset of the Coronavirus pandemic in late 2019, the world has had to deal with issues such as big shifts in the stock markets (Jones, et al., 2021), an increase in unemployment rates (Falk, et al., 2021), an increase in the demand of food due to stockpiling (Nicola, et al., 2020), imposition of travel restriction that have affected industries such as tourism and international transport (World Tourism Organization, 2020), increase in productivity (Carlsson-Szlezak & Swartz, 2021).
Previous studies on the dynamics of COVID-19 have examine the effect of the virus from various fronts including Unemployment (Klein & Smith, 2021), Health, Social and Political (Yunfeng, et al., 2021). Ideally, the effects of the Corona Virus pandemic on the growth of various economies around the globe are apparent but to what extent does it affect an individual? The current study is centered around examining the effect of the coronavirus in South Africa. In particular, the current study seeks to examine how the pandemic affects economic growth if it does.
The current work proposes the examination of the change of the Producer Price Index in South Africa before and after the Corona Virus epidemic. To my knowledge, there exists limited research focusing on the effects of Covid-19 on the Producer Price Index. Therefore, this study will examine the behavior of PPI before and during Covid-19 to establish whether Covid-19 which is considered a modern-day pandemic affected the PPI of South Africa. Based on the findings, we will use an ARIMA model to predict whether the country’s PPI will show an upward or downward trend.
To address the research objective, the following questions will be answered regarding the behavior of the South African PPI: