Income support: beware hidden bear traps
The imminent withdrawal of government’s income support measures will test consumer and corporate resilience, and reveal the true extent of labour-market scarring in SA. The results are unlikely to be pretty
SA should not underestimate the scarring inflicted on the consumer by the Covid pandemic, or the time it will take to heal the country’s labour market. If the damage to consumption and household savings proves long-lasting, it could delay SA’s economic recovery.
This is the view of BNP Paribas chief economist Jeff Schultz, based on a deep dive his research team has done into emerging market (EM) labour markets...