The economics of Covid-19 in South Africa: Early impressions

Type Working Paper - DPRU Working Paper 202004 Haroon Bhorat, Tim Köhler, Morné Oosthuizen, Ben Stanwix, François Steenkamp and Amy Thornton
Title The economics of Covid-19 in South Africa: Early impressions
Publication (Day/Month/Year) 2020
We bring together a set of early impressions on the economics of the pandemic in South Africa, focused on several areas that are of key concern. In Section 2 we assess the potential economic impact of the pandemic. This begins by looking at current global economic forecasts, how previous downturns have impacted on the South African economy, and what the existing projections suggest in terms of South Africa’s projected GDP growth rates. We then assess the monetary and fiscal responses to the crises, detailing the various relief measures, and the implications for the fiscus. The section ends by reviewing the existing relief plans, with a particular focus on social assistance. Given the dramatic economic impact of a complete lockdown, there are then important questions about how the country shifts toward reopening. In Section 3 we present an analytical instrument that can be used to guide thinking about the length and intensity of lockdowns in South Africa. Here we use detailed occupation and industry data to create measures that examine transmission risk and economic importance by sector, in order to see how the public health and economic concerns can be balanced. This approach is arguably generalisable to other countries.

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