The South African Reserve Bank (Sarb) said today, it now expects the economy to plunge by a massive 6.1% this year as COVID-19 impact filters through the economy.
Sarb governor Lesetja Kganyago, said the extension of the nationwide lockdown by an additional 14 days, bringing the total number of shut down days to 35 would further hurt the economy.
“Both the supply and demand effects of this extension reduce growth and deepen it in the short-term, as businesses stay shut for longer and households with income spend less,” Kganyago said.
“This will likely also increase job losses, with further consequences for aggregate demand. The impacts will be particularly severe for small businesses, and individuals with earnings in the informal sector.”
The latest forecast by Sarb is more gloomy than the estimates contained in its Monetary Policy Review document released last week, which predicted a contraction of between 2% to 4%.
