Virus could push SA further into the red

JOHANNESBURG – The South African Reserve Bank (SARB) has warned that the coronavirus outbreak could push the county’s struggling economy further into the red after revising the growth outlook by as much as negative 4percent in 2020.

The central bank said in its Monetary Policy Review yesterday that the Covid-19 pandemic would cause much deeper problems than anticipated.

SARB governor Lesetja Kganyago said even this forecast was probably too optimistic, as it predated the government’s decision to lock down the economy.

“More recent work suggests 2020 growth will be in a range of -2 to -4percent, with downside risks should the lockdown be extended, or if the global economy weakens more than currently projected,” Kganyago said.

“Further out, there is limited scope for a rebound, but growth is now unlikely to exceed 1percent in 2021. South Africa was already in a recession prior to the Covid-19 shock, and the situation has become more challenging since.”