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The South African economy is said to contract to levels last seen since the Great Depression of the 1930s.
South Africa will record its worst economic performance since the Great Depression with Treasury projecting a contraction of 7,2 percent because of the Covid-19 pandemic has exacerbated the already weak economic environment.

During the tabling of the special adjustment budget yesterday, Finance Minister Tito Mboweni spoke frankly about the negative impact of the pandemic on the world economy that is set to contract by 5,2 percent with millions of workers losing their jobs.

“The South African economy is now expected to contract by 7,2 percent in 2020. This is the largest contraction in nearly 90 years.”

Mboweni noted that domestically, the unemployment rate reached 30,1 percent for the first quarter of the year. He said that if economic growth continues to stagnate, we would risk having a sovereign debt crisis.

“A sovereign debt crisis is when a country can no longer pay back the interest or principal on its borrowings. We are still some way from that.
“But if we do not act now, we will shortly get there,” he said. — Reuters.