Finance minister Tito Mboweni’s supplementary budget highlights the stark reality of the fiscal, economic and social crisis facing SA. As we all have come to realise in the past few months, the Covid-19 pandemic and lockdown measures put in place to contain its spread have collapsed SA’s already weak growth prospects, dumping us into the biggest economic contraction since the Great Depression.

The National Treasury now forecasts GDP to contract 7.2% in 2020, close to the SA Reserve Bank’s forecast. Meanwhile, the IMF, which also published its revised global growth forecasts on the same day the supplementary budget was presented, now expects the economy to contract by 8% this year, and Absa Research’s is even more gloomy, with our forecast that GDP will shrink nearly 10% this year as large parts of the economy, such as tourism, suffer a mortal blow and demand is impaired by rising joblessness, pay cuts and shattered confidence. And yet we are far from the most pessimistic in ou...

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