ISAAH MHLANGA: With the right policies, at least pain won’t be self-inflicted
The downward spiral from low consumer confidence to low business confidence can be short-circuited
SA’s post Covid-19 economic recovery will depend on several factors, many of which are within the policymakers’ control and others aren’t. As an economy where roughly 60% of the expenditure side is accounted for by household consumption, consumer confidence will be critical for the recovery of economic growth. However, this time around consumer confidence is likely to remain depressed, driven by factors policymakers cannot directly control. This implies that economic growth will not recover quickly even if the economy is opened up quickly.
The recovery will depend on two critical factors, one of which can be influenced by economic policymakers, while the other is independent of economic policy. The first is job security and employment prospects once the crisis is over. In the current environment, with thousands of companies expected to close shop, job security is possibly at its lowest since the dawn of democracy. The loss of jobs, forecast to be a minimum of 1.7-milli...