Omicron’s Effect on SA’s Economy: Grants, Fuel, Interest Rates, and Tourism Sector To Take a Knock

Omicron’s Effect on SA’s Economy: Grants, Fuel, Interest Rates, and Tourism Sector To Take a Knock

  • Economists working for the Bureau for Economic Research have shared their predictions for South Africa's economy following the discovery of the Omicron variant
  • The South African economy has already sustained knocks in the fourth quarter due to loadshedding and a steel strike
  • Omicron could potentially affect South Africa's tourism sector, fuel prices, social welfare ability, and interest rates

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The Bureau for Economic Research (BER)'s economists predict that the discovery of the Omicron variant will have a negative effect on the South African economy. This will deepen the effects of an economic situation already negatively affected.

October's three-week steel strike and the fourth quarter's loadshedding have knocked the country's economy, which is now being affected further by the new variant.

According to News24, travel bans and restrictions placed on South Africa by countries across the world will damage the tourism sector, which is currently trying to recover from previous lockdowns.

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Omicron, Covid-19, economy, interest rate, tourism, SASSA, loadshedding, steel strike
Omicron is predicted to further worsen South Africa's current economic situation. Image: Getty Images
Source: Getty Images

Effects of Covid-19 on different aspects of South Africa's economy

BusinessTech reports that the new variant can affect South Africa's interest rates, ability to continue distributing grants, and exchange rants.

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In January the South African Reserve Bank is scheduled to determine the interest rate hiking cycle for the new financial year. If Omicron has negative effects on the economy, they may choose to pause the cycle.

“Regarding fiscal policy, further economic pain, including potential hospitality sector job losses, increases the probability of an extension of the social relief of distress grant beyond March 2022 when it is set to end," the BER said.

Reactions to economic predictions following Omicron

@Dominic59152952 asks:

"Where are we heading as a country?"

@AsaSalie1 said:

"Ok I see the pattern. Our electricity rates goes up then we face regular petrol increases. Now we being forced to deal with mandatory expired vaccines. It's now time for our dose of loadshedding?"

Read also

Ramaphosa praised by tourism sector for calling out travel bans, president addresses importance of vaccines

@Sicelo_Qwabe1 believes:

"We need zombies now, Corona is overrated."

@56b7550980d6428 shared:

"The narrative is starting to fall apart!"

Travel Ban: WHO says keep borders open

Yesterday Briefly News reported that Matshidiso Moeti, the regional director-general of the World Health Organization (WHO) in Africa, has encouraged countries to rescind their travel bans on southern African countries following the announcement of the Omicron variant of Covid-19.

Moeti believes that, while travel bans can curb the spread of a variant, they can negatively impact economies and lives in areas that are already struggling.

He says the countries should rather champion scientific research and only act when there is more evidence.

Source: Briefly News

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