SA must pursue fiscal reform to prevent a dire debt trap
The country knows what to do, and should not shy away from approaching the IMF
Within a short period the coronavirus pandemic has become the greatest economic shock for at least a century. Lockdowns motivated by public health considerations have caused a shock of uniquely adverse depth and reach in SA and elsewhere.
On the economy’s demand side, that shock is devastating, with gross domestic expenditure forecast by the Bureau for Economic Research (BER) at Stellenbosch University to decline 9.9% in 2020. The effect of this demand shock is worsened by the supply side effect of the lockdown, which has shrunk the effective labour force, severed supply chains and frozen large sectors of the economy...