Friday, 27 March 2020

COVID-19 and the economy: Lockdowns, recession and policy responses

  • Year: 2020
  • Author(s): Neva Makgetla, Nokwanda Maseko, Kudzai Mataba (TIPS)

The South African economy is affected by the COVID-19 pandemic through:

  • The sharp fall in growth initially in China and then in Europe and the US as a result of measures to contain the virus; and
  • The increasing pressure to exercise social distance and lock down households and businesses to slow the spread of COVID-19, including in South Africa (from 26 March 2020) as well as all its major trading partners.

These measures brought an extraordinarily sharp decline in global production and
employment, especially in the US and Europe, over the past month. The result will likely be a global recession, with very uncertain prospects for recovery despite the adoption of extremely large stimulus packages in the US and much of Europe.

This briefing note first outlines the progress of the pandemic internationally and in South Africa. It then summarises key economic consequences, which have led to (widely varying) projections for global and South African growth. A final section reviews international and South African economic policy responses to the sharp slowdown.

The economic impacts of COVID-19 are changing rapidly. Information in this briefing note is valid as of 26 March 2020.

Download a copy or read the policy brief online.

 

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