Reserve Bank foresees possible 2% shrink in the economy due to coronavirus
The Reserve Bank projects the lockdown period can result in a 2.6% contraction of GDP from the production side of the economy.
The South African Reserve Bank has predicted a possible 2% contraction in the country’s economy this year a result of the coronavirus pandemic.
This is according to their latest Monetary Policy Review which has labelled the pandemic the “biggest shock to the global economy since Lehman Brothers’ bankruptcy”.
The SARB did, however, add that monetary policy has space to respond given lower inflation and advised that stronger recovery needs “bridging” and longer-run fixes.
The Reserve Bank projected that the lockdown period could result in a 2.6% contraction of GDP from the production side of the economy.
The 21-day shutdown is likely to reduce 2020 GDP by 2.6 percentage points, immediately, not counting indirect effects. #AprilMPR #SARBMonetaryPolicyForum #TalkToTheSARB pic.twitter.com/uTtePEZ3fF
— SA Reserve Bank (@SAReserveBank) April 6, 2020
Additionally, the report estimated that the country would see about 370,000 job losses and about 1,600 businesses going insolvent.
Significant job losses and business failures are expected, with a partial rebound following the shutdown. #AprilMPR #SARBMonetaryPolicyForum #TalkToTheSARB pic.twitter.com/TB9u8zK40m
— SA Reserve Bank (@SAReserveBank) April 6, 2020
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