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The president reacted after Stats SA released the most recent GDP results, which showed that the country had plunged further into recession during the national shutdown.
President Cyril Ramaphosa. Image: GCIS.
JOHANNESBURG – Pressure is mounting on the administration of President Cyril Ramaphosa to revive the country’s ailing economy.
Ramaphosa said Tuesday that it would implement an employment stimulus plan over the next month.
The president reacted after Stats SA released the most recent GDP results, which showed that the country had plunged further into recession during the national shutdown.
Stats SA said the economy contracted 16.4% from the first quarter to the second quarter.
But to look at this differently, if the economy continues to contract similarly over the next few quarters, Stats SA said the annualized figure is 51%.
“While the contraction of 16.4% in the second quarter (or 51% annualized) represents an anomaly due to the blockade imposed at the end of March, these figures reinforce the importance of allowing a strong rebound in subsequent quarters”, Ramaphosa it said in a statement.
“Countries around the world are facing significant economic upheaval as a result of the pandemic, which has caused the worst global recession in decades. South Africa has not been rid of these realities, ”he added.
Ramaphosa said there were two important processes before he could implement his job stimulus.
First, you want the social partners to present you with a social pact on economic recovery. Thereafter, the government would finalize its recovery strategy.
“This strategy will include urgent fast-track structural reforms, expansion of employment programs, facilitation of large-scale investments in infrastructure projects, and implementation of measures to promote localization and improve regional and continental trade.
“Finally, the presidential employment stimulus will begin to be implemented within the next month and will expand opportunities through public and social employment to counter job losses,” Ramaphosa said.
But economist Isaah Mhlanga said more needed to be done.
“We are going to have a long period of economic recovery in large part because we don’t have the fiscal space to respond much more aggressively than other countries, but also because we are doing economic reforms much more slowly, which means that investment is going to take a lot longer to recover, ”Mhlanga said.
Ramaphosa said that the country could not continue business as usual and that now was the time to act quickly and boldly to put South Africa on a rapid growth trajectory.
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