Virus could cost South Africa 5 years of potential output
JOHANNESBURG – South Africa stands to lose five years of potential economic output due to the shock from the coronavirus pandemic and measures to curb its spread, according to the nation’s central bank.
South Africa fell into a recession even before the first case of the coronavirus was detected in the country. Economic growth-projections deteriorated after the government imposed one of the strictest lockdowns in the world on March 27 that shuttered most business activity. Gross domestic product will contract 7% this year, according to the central bank.
While growth is forecast to recover to 3.8% next year and 2.9% in 2022, GDP will still be smaller than the levels recorded in 2018 and 2019, Alex Smith, the Pretoria-based Reserve Bank’s lead economist for the financial stability department, said in a presentation on Wednesday. “Hence, the Covid shock could result in nearly half a decade of lost output.”
Source: iol.co.za
