Coronavirus: SARB expects economy to shrink, thousands to lose jobs

Coronavirus: SARB expects economy to shrink, thousands to lose jobs

- The South African Reserve Bank has issued a warning over the coronavirus pandemic and its effect on the economy

- The SARB predicts that a 2-4% contraction could be on the cards amid already difficult times

- The chance of a rebound next year, in the bank's opinion, is also highly unlikely

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Around the world, the coronavirus has become so much more than just a health crisis with economies baulking under the pressure of international lockdowns.

Fin24 reports that the South African Reserve Bank expects the economy to contract by between 2% and 4% in the fallout from the pandemic this year.

Detailing the predictions in the its Monetary Policy Review, SARB also noting there was limited scope for the economy to recover next year, indicating it is unlikely growth will exceed 1%.

But the nation's economic troubles were already brewing ahead of the 21-day lockdown period, with the central bank noting:

"South Africa was already in recession prior to the Covid-19 shock, and the situation has become more challenging since."

READ ALSO: Cele would like to see alcohol restriction extended past lockdown

The shutdown, according to the Reserve Bank, is projected to cost SA around 370 000 jobs, 1 600 businesses going insolvent and a 2.6% contraction of the GDP.

This largely depends on the amount of time it takes businesses to bounce back after the lockdown ends. reported that the possibility of the lockdown being extended may well be a reality as South Africa does its best to limit the loss of life seen in other nations and protect the healthcare sector from being overwhelmed.

However, there has yet to be any official word on an extension, with the end of the lockdown remaining on 16 April.

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