Economist: Covid-19 could cost SA economy 3 million jobs
The coronavirus outbreak and subsequent shutdown of the South African economy for at least 21 days could see some 3 million people join the unemployment queue.
This is according to economist Duma Gqubele, who has described the pending job losses as a “calamity and humanitarian disaster”.
The Covid-19 outbreak, which was first detected in Wuhan in China in December,has not spared some of the big economies of the world, including the European Union and the US.
A staggering 10 million US workers have lost their jobs in the second half of March as the coronavirus forced stores and businesses nationwide to close their doors.
In France, some 4 million people have filed for the same benefits in a matter of two weeks.
The South African economy, which was already in a technical recession before the coronavirus crisis, will also feel its wrath.
“This is a calamity, it’s a humanitarian disaster,” says Gqubele.
“In South Africa, what is happening with the lockdown is going to last for at least two or three months. If it’s two months our economy will take a hit to GDP of about R600 billion.
“That means that the economy will decline by 5% to 10% according to most forecasts. This is more than three times of what happened in the global financial crisis.”
The country’s current unemployment rate, currently at 29.1%, is predicted toincrease even further over the next few quarters.
Gqubele says: “We are now at 10.3 million unemployed. I predict that within months we will be at 11 million and a few months after that we will be at 12 million. This is a catastrophe and I don’t understand why government is not doing to address this challenge in our economy.”