Rating agency Moody’s says South Africa will take longer than most countries to revive its economy and increase GDP after the coronavirus pandemic.
Moody’s has outlined the key aspects it will be looking out for when Finance Minister Tito Mboweni delivers his Medium Term Budget Policy Statement next month. Earlier this week, Stats SA revealed that the economy contracted by 51 percent year on year in the second quarter.
Moody’s Lucy Villa says South Africa will take between two and three years to recover from the economic impact.
“Many economies will contract in 2020 and the question for us is at least when are you back to the level of economic activity before which is 2019. What’s the strategy to stabilise debt to GDP level in an environment where we know that fiscal deficits which are how much can the government put in place in the next one-two-three years to be able to stabilise? A strategy that recognises the economic and social challenges.”
SA’s massive GDP contraction:
South Africa recorded a massive slump in Gross Domestic Product in the second quarter as COVID-19 took its toll on the economy.
The economy contracted an annualised 51 percent in the second quarter when compared to the second quarter of 2019.
Effects of SA’s GDP data on unemployment figures expected later this month
The Statistician-General of South Africa Risenga Maluleke delivered the worst economic news in a generation, saying the South African economy has collapsed significantly.
The figures are so dire that many have begun to wonder just how concerning the unemployment figures contained in the Quarterly Labour Force Survey due out this month, will be.
Statistician-General Risenga Maluleke and SABC News Economics Editor Thandeka Gqubule-Mbeki on the GDP figures:
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