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SA economy opens steadily - will it bring any relief to the contraction?

28 May 2020 6:43 PM
Tags:
South African economy
Lockdown
COVID-19
level3

On Monday many sectors of the economy will return to business as usual.

The relaxing of many of lockdown level 4 regulations means lots of changes in terms of who can and cannot trade.

But is there anything in the lifting of the regulations, can the changes announced for level 3 go any way to alleviate the effects of the economic contraction suffered due to the impact of Covid-19?

It merely mitigates... it brings some businesses online but that does not mean businesses are going back to normal...consumers are not going to spend because confidence is low, job prospects are zero, so consumers are going to hold on to what they have...the economy is going to experience difficulties for quite some time.

Isaah Mhlanga, Executive Chief Economist - Alexander Forbes Investments

Minister of Trade Ebrahim Patel's comment "most people are going back to work from Monday" sounded rather optimistic in the light of the fact that many jobs are gone, many companies are gone and that many businesses would not want the full complement of people back at work.

It does make sense for employers to say they don't want the full complement back... two weeks ago the mining sector opened up and since then two mines had to close because they had infections...a resurgence of infections is not only a SA problem we've seen it globally where people have rushed to open up - it's likely to be a stop-and-go.

Isaah Mhlanga, Executive Chief Economist - Alexander Forbes Investments

We are not out of the woods; the economy will continue to struggle significantly.

Isaah Mhlanga, Executive Chief Economist - Alexander Forbes Investments

We have some permanent loss and there's a lot of this that we cannot see - for example - you might be able to return to your work place...but until the schools open fully many parents would not be able to return to work...then there is the issue of transport...many cannot get to work without sufficient public transport.

Gina Schoeman, economist - Citibank Global Economics team

Also the income loss - we've tried to give our best estimate regarding employment losses - our estimate is SA will lose about two million jobs as a result of the shock of Covid-19 - but what we don't know is how many people took paycuts?

Gina Schoeman, economist - Citibank Global Economics team

I'm not sure how low SA confidence can go because it was already very low before Covid-19 hit.

Gina Schoeman, economist - Citibank Global Economics team

Listen to the interview below.

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28 May 2020 6:43 PM
Tags:
South African economy
Lockdown
COVID-19
level3

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