Covid-19: Worst still to come
Grim forecasts of economy shrinking 6%, downgrade to junk, job losses
How low can we go? Economists were scrambling to revise down growth forecasts as SA entered its first day of lockdown on Friday. Estimates were that the economy could contract this year by 6% or more. The best-case scenarios were a contraction of 2%-3%.This is a huge swing from the modest positive growth forecasts of a month ago, before the global impact of the Covid-19 virus and the oil price war. Then economists pencilled in mildly negative numbers, which are now being taken down further as they factor in the impact of an almost total shutdown of the economy that some believe could last longer than 21 days. A deep recession would severely affect employment and incomes and would likely lead to SA's public debt spiralling way beyond the already unsustainable numbers pencilled into last month's budget. Ahead of rating agency Moody's scheduled announcement on Friday evening, most economists were expecting a downgrade to junk status - with downgrades by rivals S&P Global Ra...
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