People are going to be poorer in the next 3 years than they have been last year. That’s according to economist Mike Schussler.
He says South Africa can expect one of the worst Gross Domestic Product (GDP) per capita declines in the world.
Schussler says the country’s per capita GDP for the second quarter of this year will be similar to the level seen in the year 2000.
Schussler argues that the local economy will decline by about 9% this year, saying the total recovery will take about 11 to 14 years to go back to 2014 levels.
According to the economist, COVID-19 hit South Africa while the country was carrying double the unemployment load of any large economy.
Currently, unemployment is at 30.1%, and it’s expected to rise to about 40% as a result of the effects of COVID-19.
Also worrying is the growing levels of debt to GDP, which is high when compared to other emerging markets. Schussler says there is a possibility of government debt to GDP will have reached 100% by 2024.