HILARY JOFFE: An economic crash of any size should be a wake-up call
One bank economist recently revised his forecast for the economy this year downwards from -8% to -9%. Another did the reverse. This week’s load-shedding prompted a third to take her forecast down to -10%. And the grisly second-quarter GDP figures due out on Tuesday will no doubt prompt yet another round of revisions. Does the exact magnitude matter? Any of these outcomes is truly terrible, especially for an economy that was shrinking even before the Covid crisis. And while there’s a big difference between, say, 1% and 2%, the further away from zero you get the less of a difference it seems to make. We’ve never seen a contraction anything like this steep; we don’t know yet what -7% or -10% looks like in terms of damage to SA’s social and economic fabric, except that it’s likely to be extreme.
So why does anyone worry about the precise number?..