South Africa’s central bank on Thursday forecast the economy will shrink by 8.2 per cent in 2020, but some forecasts foresee a double-digit contraction due to a fallout from coronavirus pandemic.
The bank revised downwards its outlook as the impact of the lockdown imposed in March, becomes clearer.
“The bank now forecasts a GDP contraction of 8.2 per cent in 2020, compared to the 7.3 per cent contraction forecast in July,” governor Lesetja Kganyago said in a televised address.
In report Wednesday, the Paris-based Organisation for Economic Co-operation and Development (OECD) stated that South Africa’s GDP was likely to shrink by 11.5 per cent.
OECD warned that South Africa will struggle to emerge from the slump owing partly to power cuts by state energy firm Eskom.
But the central bank is upbeat, expecting the economy to grow by 3.9 per cent in 2021 and by 2.6 per cent in 2022.
Government had shut down the country in a bid to rein in the spread of coronavirus, pushing the already-ailing economy into deeper recession.
Since June, government has gradually allowed businesses to resume operations in a bid to shore up the economy.
It will open up borders for international travel starting next month.
The central bank chief warned that recovery to pre-pandemic levels would take “several years”.
Even before the economic fallout from the coronavirus lockdown, South Africa’s economy was in recession and reeling from high unemployment.
The country has been hard-hit by the pandemic recording 653,444 infections so far, and 15,705 deaths.