South Africa’s economy, according to the central bank forecast, is likely to contract more than 30% in the second quarter triggered by the lockdown. The annualized decline in GDP is forecast at 32.6% for the three months through June from the previous quarter.
Billed as the deepest quarterly decline since at least 1990, the central bank’s projection is contained in the annual report that was released on June 29. The report shows the economy will expand on a quarterly basis in the three months through September.
The economy contracted an annualized 2% in the three months through March. The economy was in a downswing since the financial meltdown in 2009.
South Africa implemented the lockdown in letter and spirit. The restrictions were eased from May 1. Though it allowed most of the companies to open by then, the impact of the Covid-19 was so severe that a good number of companies were closed down permanently and some of them are on the verge of closing down due to a combination of
factors like demand and supply disruptions and credit squeeze. The central bank sees the economy contracting by 7% this year. The National Treasury projects a 7.2% decline in output.
