It will be difficult for economy to recover from impact of lockdown: Economist

Chief Economist at Efficient Group, Dawie Roodt says the expected rebound in economic and Gross Domestic Product (GDP) growth in the third quarter of the year will not be enough to turn around the country’s growth picture as the economy recovers from the impact of the nationwide lockdown due to the coronavirus pandemic.

Figures released by Statistics South Africa on Tuesday show that during the second quarter of 2020 South Africa’s GDP showed had a 51% annualised decrease.

Roodt says the impact of the nationwide lockdown will be difficult for the economy to recover from.

“Well certainly the reason why the economy has gone into a down spin and still in a down spin has to do with the lockdown, it’s important to understand that it’s not the virus causing it, it is the lockdown causing this, so from a quarter-to-quarter basis it may appear as if the third quarter will be better but if you stand back a little and then you will find that no the economy is actually still in very deep trouble despite the expected bounce back in the third quarter.”

In the video below, Nedbank Chief Economist, Nicky Weimar says the latest GDP figures come as no surprise:

The Congress of South African Trade Unions (COSATU) says the best way to stimulate the economy is to reduce social expenditure.

In the video below, Cosatu Deputy President Mike Shingange shares Cosatu’s views:

President Cyril Ramaphosa says the country’s massive economic contraction caused by the coronavirus pandemic should spur all South Africans to do all they can to help to rebuild the economy.

Ramaphosa says a Social Compact on Economic Recovery will be presented to him after consultations with advisory council, NEDLAC. Government will then finalise its Economic Recovery Strategy.

Ramaphosa also says the Presidential Employment Stimulus will commence implementation within the next month to increase job opportunities through public and social employment to counteract job losses.

Below is Ramaphosa’s full statement: