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The country has sunk further into a recession, with Stats SA announcing that the economy contracted 16.4% from the first quarter to the second quarter of 2020.
FILE: President Cyril Ramaphosa announces changes to the National Executive at a press conference held at Union Buildings, Tshwane on November 22, 2018. Image: GCIS
JOHANNESBURG – As South Africa sees its economy in decline due to the coronavirus, President Cyril Ramaphosa said now is the time to build a new economy and unleash the country’s true potential.
The country has sunk further into a recession, with Stats SA announcing that the economy contracted 16.4% from the first quarter to the second quarter of 2020.
The biggest negative contributors were manufacturing, commerce and transportation, which were severely affected by the closure regulations. However, agriculture and communication improved.
All non-essential businesses and services closed, causing most industries to post a decline in growth during the second quarter.
The president said that having acted swiftly and decisively to save lives and control the pandemic, the government’s focus is now on economic recovery.
In a statement, Ramaphosa said that while the contraction of the economy represented an anomaly due to the lockdown imposed at the end of March, these figures reinforced the importance of allowing a strong rebound in subsequent quarters.
The president has presented three important processes underway to support the economic recovery.
He wants the social partners to present him with a social pact on economic recovery, he said thereafter, that the government would finalize its recovery strategy and only then would the president implement his employment stimulus in the next month.
* CYRIL RAMAPHOSA: We need national effort to rebuild South Africa’s economy
But Alexander Forbes chief economist Isaah Mhlanga said repairing the economy would likely take years.
“We do not expect any improvement because we need the economic reforms that are going to agglomerate the private sector to enter and reinvest in the economy. My estimate is that we will only return to the levels of the 2019 economy in 2023 or 2024. “
The president said he would make more announcements about his plans in due course.
Hear from economist Dr. Miriam Altman on the collapse of GDP in the second quarter
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