South African President Cyril Ramaphosa said the massive drop in the country’s gross domestic product during the second quarter of this year reflects the severe impact of the global coronavirus pandemic on the economy, reported Eye Witness News.
President Ramaphosa’s statement came after Statistics South Africa revealed the most recent GDP results, which showed the country had slipped deeper into recession during the nationwide lockdown.
As per the data compiled by Stats SA, the economy shrank by 16.4% from the first quarter to the second quarter. The agency even warned that if the economy continued to contract in a similar way, the annualized figure would be set at 51%.
“While the 16.4% contraction in the second quarter (or 51% on an annualised basis) represents an anomaly due to the lockdown imposed at the end of March, these figures nevertheless reinforce the importance of enabling a strong rebound in subsequent quarters,” the South African president said in a statement.
He added that almost all countries across the world are facing significant economic disruption due to the pandemic, leading to the worst global downturn in decades. He said South Africa has not been spared either.
South Africa went into complete lockdown in March, shutting down the majority of the already weak economy except for essential services.
Ramaphosa said that he would implement an employment stimulus plan within the next month. The South African president said that there were two important processes before he could implement his employment stimulus. He said he wants social partners to present a social compact on economic recovery to him and thereafter government would finalise its recovery strategy.
Ramaphosa said the strategy will include fast-tracking urgent structural reforms, expanding employment programmes, facilitating large-scale investment in infrastructure projects, and implementing measures to promote localisation and enhance regional and continental trade.
He said the Presidential Employment Stimulus, which is expected to commence implementation within the next month, will expand opportunities through public and social employment to counteract job losses.