A man walks in empty streets in Johannesburg on the first day of the 21-day lockdown. Picture: THAPELO MOREBUDI
A man walks in empty streets in Johannesburg on the first day of the 21-day lockdown. Picture: THAPELO MOREBUDI

In this edition of the Business Day Spotlight, we look at how South Africans are feeling about the economy given the Covid-19 crisis and recent Moody’s downgrade.

Our host Mudiwa Gavaza is joined on the line by Prof Talita Greyling, an economist at University of Johannesburg, specialising in well-being economics to discuss their ongoing study about how people are feeling about the economy.

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South Africans are angry after their first weekend under lockdown. Covid-19 has been playing havoc with South Africans’ emotions over the past month. “We have made a 180º turn in our emotional state; from being joyful, anticipating good things to happen and showing trust, to being angry, anticipating the worst and showing disgust and fear.” 

These are the results of research undertaken by Greyling and Dr Stephanie Rossouw of the Auckland University of Technology, who, in collaboration with Afstereo, launched SA’s happiness index in April 2019, and recently expanded their study to include the analysis of the emotions of South Africans.

The discussion starts with an explanation of well-being economics. Greyling says this is a relatively new area of study that is part of behavioural economics. She says hard economic data, such as GDP growth and inflation projections, don’t often tell the full story of how people in a country are feeling. This is the gap the company is trying to fill.

Greyling says sentiment analysis is able to give them a real-time idea about how people feel about certain issues. The data collected can be used to figure out trends that can correlate to how markets will move given a certain time or event.

This past week, international ratings agency Moody’s issued a country rating for SA. After being the only ratings institution still holding the country above investment grade, Moody’s finally downgraded SA’s profile, given issues such as the budget deficit and problems with state-owned enterprises (SOEs).

Greyling says there seems to be little conversation about the economy in SA from their research. This is also the case in Australia and New Zealand, where they are conducting similar studies. But the Moody’s downgrade, coupled with the coronavirus crisis, seems to have struck a chord as people showed concern, particularly about issues such as job security.

Greyling also explains how they go about collecting data, the rationale for doing this research, how it can be used discern trends, and plans to expand their data pool.

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