The Chief Executive Officer of Standard Bank, Sim Tshabalala, has described the coronavirus pandemic as the worst economic shock in 100 years. The bank released its financial results and reported a 44% drop in profits for the six month period that ended in June.
This comes as South Africans battle to keep their finances afloat amid the coronavirus pandemic. Standard Bank says its clients are currently failing to pay back loans and some have requested extensions to their payment holiday.
Tshabalala says swift action needs to be taken by the government and social partners in order to avoid massive job losses.
“We are projecting a GDP decline of 8.5 % in SA this year. That’s worse than anything seen since 1918. We are projecting that the recovery will be early next year so it will be roughly 4.5%. The economy will still be smaller next year than it was in 2019. Unless swift action is taken by social partners, led by the government but definitely social partners. You could have a jobs bloodbath.”
The unemployment rate in South Africa increased by 1% to 30.1% in the first quarter of 2020. Data recently released by Stats SA revealed that the number of employed persons decreased by 38 000 to 16. 4 million, while the number of unemployed persons increased by 344 000 to 7 million in the first quarter of this year, compared to the fourth quarter last year.
Labour Minister Thulas Nxesi says the coronavirus has had a devastating impact on SA economy: