GDP recovery from the COVID-19 crisis
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According to BER, Increasingly, a V-shaped global GDP recovery from the COVID-19 crisis seems unlikely. This will weigh on the South African growth outlook, especially as the costs of the strict domestic lockdown mount.
Also, a new report by the international consulting firm Singular estimates that South Africa could take years to recover from the coronavirus crisis.
Singular estimates that if Level 4 - which started on 1 May - continued for three weeks, followed by Level 3 for another three weeks, and SA then remains at Level 2 and 1 for the rest of the year - the GDP could shrink by 14% this year compared to 2019. The economy would take six years to recover at least 80% of value lost during lockdown, says Lorenzo Tencati, senior partner at Singular.
The SA Reserve Bank expects a contraction of around 6% this year, while the corporate grouping Business for South Africa expects that the GDP will shrink by between 10% and 16.7%. By contrast, SA's economy shrank by only 1.5%% following the 2008 financial crisis.
Also, a new report by the international consulting firm Singular estimates that South Africa could take years to recover from the coronavirus crisis.
Singular estimates that if Level 4 - which started on 1 May - continued for three weeks, followed by Level 3 for another three weeks, and SA then remains at Level 2 and 1 for the rest of the year - the GDP could shrink by 14% this year compared to 2019. The economy would take six years to recover at least 80% of value lost during lockdown, says Lorenzo Tencati, senior partner at Singular.
The SA Reserve Bank expects a contraction of around 6% this year, while the corporate grouping Business for South Africa expects that the GDP will shrink by between 10% and 16.7%. By contrast, SA's economy shrank by only 1.5%% following the 2008 financial crisis.
