Economy may shrink as much as 4%, central bank says
JOHANNESBURG – South Africa’s economy could contract by 2% to 4% this year due to the coronavirus pandemic and measures to curb its spread, according to the Reserve Bank.
A 21-day nationwide lockdown aimed at slowing the spread of the pandemic will reduce the rate of change in gross domestic product for this year by 2.6 percentage points, the central bank said in its six-monthly Monetary Policy Review on Monday. The monetary policy committee projected in March that the economy will contract by 0.2%, but that was before the lockdown was announced. “Some growth now becomes irrecoverable,” according to the Reserve Bank.
South Africa’s economy is stuck in its longest downward cycle since World War II, with rolling blackouts and poor business and consumer sentiment weighing on growth. Uncertainty and downward shocks to economic prospects posed by the coronavirus mark “an inauspicious start to a new decade after the serial disappointments of the 2010s,” the central bank said.
Source: iol.co.za