The South African Reserve Bank (SARB) has all but confirmed that the COVID-19 outbreak will see Sout Africa enter into a deep recession this year.
The central bank in its Monetary Policy Review document said its early forecast of a 0.2% percent, announced last month, was “too optimistic” and that the 21-day lockdown has forced it to revise its estimates.
“More recent work suggests 2020 growth will be in a range of -2% to -4%, with downside risks should the lockdown be extended, or if the global economy weakens more than currently projected,” said SARB.
“Further out, there is limited scope for a rebound, but growth is now unlikely to exceed 1% in 2021. South Africa was already in recession prior to the COVID-19 shock, and the situation has become more challenging since.”
The SARB’s grim numbers mirror those of investment bank, BNP Paribas, and the Institute of International Finance, released last week. The poor economic forecast spells doom for millions of South Africans who are out of work and looking for a job. The South African economy has not grown above 2% since 2013 and is in its longest downturn since 1945.
