Covid-19 brings with it an economic deep freeze the world over. Economies worldwide are staggering under the devastating effects of the lockdown.
Johann Els, chief economist at Old Mutual, said the economy could shrink by 2% this year and the country’s budget deficit could rocket to 10%, instead of growth of 0.9% and a budget deficit of 6.8%, which were forecast during the budget in February. To quote Mr Els: “South Africa does not have the sort of fiscal manoeuvring room that countries such as the US do, which means we will have to lend more money in order to make money available for extensive fiscal aid measures”.
South Africa offered its own economic stimulus package which includes tax relief measures, the South African Future Trust (SAFT), Debt Relief Finance Scheme, Industrial Development Corporation (IDC) Covid-19 Essential Supplies Intervention and Training Layoff Scheme.