Business Day Spotlight
PODCAST | Economic news of the week: re-opening SA’s economy
We focus on the continued effects of Covid-19 on the economy, restarting the SA economy and the government’s stimulus plan
In this edition of the Business Day Spotlight, we focus on the continued effects of Covid-19 on the economy, restarting the SA economy and the government’s stimulus plan.
Our host Mudiwa Gavaza is joined by Phil Alves, an economist and senior managing consultant at Berkeley Research Group to discuss the issues.
Join the discussion:
SA is in the fourth week of a five-week national lockdown, which was imposed in a bid to curb the Covid-19 pandemic that has infected nearly 4,000 people in SA and left at least 75 dead, as of Friday evening.
On Tuesday, President Cyril Ramaphosa announced a R500bn economic support package for SA, which amounts to 10% of GDP.
Alves says what matters at this point is making sure that South Africans have an income of some sort, given the depressed state of the economy. What will be interesting to see, he says, is where the government will get the funds.
By his estimation, the move could add a possible 7% to the country’s already high debt-to-GDP ratio, now at about 60%, but that will only be determined once the dust settles on the crisis.
On Thursday, Ramaphosa announced that the lockdown restrictions will be lifted in phases. There are five levels, with level 5 being a hard lockdown (as it is now) and level 1 the most relaxed.
He said the lockdown will be moved from level 5 to level 4 on May 1.
Alves says it is a good thing that the lockdown will start being lifted as it gives people a chance to go back to work and earn an income. However, he does caution that the recovery will likely take longer than originally anticipated. For now, the government has shed more light on how the phased re-opening approach will actually work, he says.
The discussion also touches on the effect of the coronavirus on small businesses, consumer buying-power, the concerns of corporate players, and an outlook for the SA and global economy.