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Fin24 reports that according to early projections by the SA Reserve Bank (SARB), SA could lose about 370,000 jobs this year as a result of the national lockdown and initiatives to stop the spread of the coronavirus.
SA is already battling record-high unemployment, as well as weak business confidence and an ever-increasing sovereign debt burden. In its biannual Monetary Policy Review, published Monday, the bank noted that job growth had already stalled in 2019, with the total number of employed people declining from 16.44 million at the end of 2018 to 16.34 million at the end of 2019. "Preliminary estimates suggest South Africa could lose about 370,000 jobs this year, on a net basis, with business insolvencies increasing by roughly 1,600 firms as the economy contracts," the SARB indicated. The central bank also said that the country's economy was likely to contract by between 2% and 4% this year, with growth unlikely to exceed 1% in 2021. The unprecedented 21-day national shutdown has taken a heavy economic toll, with only essential businesses permitted to remain open. Morne Mostert, Director of Future Studies at Stellenbosch University, believes that to limit damage, businesses would have to introduce flexible measures to contain costs following the lockdown period. Such measures would include reducing fixed salaries, bonus cuts, forced leave, short-time, salary freezes, and eventually retrenchments.
- Read the full original of the informative report in the above regard by Sibongile Khumalo at Fin24
- Read too, Lockdown: Sarb foresees 370,000 initial job losses, 1,600 business insolvencies, at Moneyweb
Get other news reports at the SA Labour News home page