Credit rating agency Moodys says the spike in social unrest in South Africa coupled with the rise in coronavirus infection rates in May and June poses downside risks to its four-percent growth forecast for South Africa this year.
Moodys says while confidence indicators showed improvement in the first half of the year, the evolving situation is likely to have knock-on effects for consumer, business and investor confidence.
The credit rating agency says the unrest also complicates the authorities’ efforts to restore the health of public finances.
Moodys says weaker economic growth would weigh on tax revenue, while government will likely need to support affected businesses and rebuild damaged infrastructure.
It says growing social tensions will also make it even more challenging for the authorities to contain spending.
Moody’s says the violence also highlights the social constraints the government faces in progressing its structural reform agenda.
The protests began after former president Jacob Zuma was jailed for violating a Constitutional Court order.
SA Chamber of Commerce laments business losses due to looting: