Economic outlook is getting worse, plus 5 highlights from 'Vrye Weekblad'

While lockdown assists the health sector and prevents its collapse due to large numbers of Covid-19 patients, it has deliberately placed the economy in ICU. And a fast, notable economic recovery post lockdown is highly unlikely.   

The ripple effect of Covid-19 shows that even though the growth of some economic indicators could initially look impressive after the worst of the crisis is over, the levels of general economic activity will most likely take a very long time to move back to where the economy was before the pandemic. 

It is incorrect to say, as we are hearing from many quarters, that lockdown was “only” five weeks long and that predictions of a shrink of up to 10% (which is truly frightening) in GDP this year would thus be an exaggeration. 

The point is that government has, in fact, decided that the lockdown would not be only five weeks long.

More economic activity is possible today – and we can at least walk, jog, cycle a little and buy paint – which means there will be more economic activity in May than in April. However, Level 4 is still very far from normal, writes economist Hugo Pienaar in this week's edition of Afrikaans digital weekly Vrye Weekblad.

Like many other countries, our government decided to slowly ease the lockdown restrictions. From a medical perspective, this is probably the correct decision, but we can't be blind to the economic impact of this strategy. 

By now we should all be fully aware of the grave health danger of Covid-19. Be that as it may, and keeping in mind the very difficult policy landscape we are in now, government will have to find a better balance between the economic and health concerns of this crisis. 

If not, even the expected 10% shrink in the GDP might be an overly optimistic prediction. 

Whether policies are right or wrong, we have to realise that a slow reopening of the economy could mean a serious GDP knock in the second quarter, and a very long recovery. 

Read the full article in this week's Vrye Weekblad

Must-read articles in this week's Vrye Weekblad

>> Browse the full May 1 edition

HER EXCELLENCE NKOSAZANA MUSSOLINI-ZUMA | Talibanish. Old school Soviet style. A craving for full control over her subjects. How else could we describe the regulations cooperative governance and traditional affairs minister Nkosazana Dlamini-Zuma announced this week?

AGED ANXIETY IN THE COVID GHETTO | In care homes in Europe, Covid-19 has left a trail of destruction. Tens of thousands of older persons have died, and the number keeps rising. Could strict regulations in SA's old-aged homes prevent such a disaster here? 

FREE TO READ – HA-HA-HA (IT'S NOT FUNNY)  | Do you feel like your life is ruled and ruined by these noisy guys? Why are there suddenly so many of them, and is there more to them than just their voices? 

FREE TO READ — OBSESSED WITH SUCCESS | The deputy chair of the Solidarity Fund has only one thing in mind: to make the biggest possible impact in the biggest crisis the world has seen in a century. 

LOCKDOWN DISCOUNT | To help keep you busy during lockdown, we have a special offer: Read Vrye Weekblad for R60 for 60 days.