South Africa’s economy will contract by 8% in 2020, though the International Monetary Fund projects a 3% growth in the 2021 financial year in its World Economic Outlook report.
The IMF’s 2021 growth forecast is 0.5% less its previous estimate released in June, and in line with projections by the Ministry of Finance.
President Cyril Ramaphosa has taken drastic steps to ease restrictions imposed to slow the spread of COVID-19, which at the time, were the among the strictest in the world.
Those restrictions had an adverse effect in crippling key sectors of the economy like the aviation sector, tourism sector, and manufacturing.
On the other side, South Africa still has the highest number of confirmed coronavirus cases at nearly 700,000 with 18,000 deaths recorded so far.
The 8% contraction forecast for 2020, would be among the largest estimated for emerging economies. Only topped by India and Mexico.
Meanwhile, according to the World Economic Outlook Report, Africa’s most advanced economy, Nigeria has seen a drop of only 4.3%.
South Africa, the world’s most unequal nation, is set to have an increase in economic inequality and joblessness, with 2 million jobs lost since March.