Latest lockdown a ‘light touch’ from government – but things could still get worse, economists warn

South Africa’s move to an adjusted level 2 lockdown is unlikely to hamper economic recovery, but the rise of a third wave of Covid-19 infections and further restrictions could be damaging, say economists at the Bureau for Economic Research (BER).

As with the approach to restrictions after South Africa’s second Covid-19 wave, the latest measures are focused on curbing social mobility and largely aim to keep the economy open, the group said.

The new restrictions include:

  • The evening curfew will start one hour earlier at 23h00 and still end at 04h00.
  • To allow employees and patrons to travel home before the curfew starts, nonessential businesses like restaurants, bars and gyms will have to close by 10pm. This does imply that the hospitality sector will once again bear the brunt of the restrictions.
  • All gatherings will be limited to a maximum of 100 people indoors and 250 people outdoors. This is a big, but sensible, change from the previous maximum of 250 people indoors and 500 people outdoors. Besides impacting bars, taverns and restaurants, these restrictions will also apply to all other gatherings, including religious and political.

“In a welcome relief to the liquor and hospitality industries, no additional restrictions were placed on the sale of alcohol. Schools and borders will remain open,” the BER said.

“Depending on the severity of the third wave, these measures may change in future. The president reiterated that it remains mandatory to wear a mask when outside and emphasised that non-essential travel and gatherings should be avoided during this time.”

The BER said that if this fairly light touch from the government continues, and if the intensity as well as the duration of the third wave can be contained, the associated setback to the domestic GDP recovery should be relatively limited.

“Even so, an intense third wave where daily new infections equal or rise above the peak of the second wave remains a key downside risk to the GDP recovery.”

Citing data from Stats SA, the BER said South Africa’s economic recovery was largely sustained in the first quarter of 2021.

“As often repeated, the highest return to fighting Covid-19 is the rapid vaccination of a large share of the population.

“Amid some inconsistencies and a fair share of frustration from the public, the second week of South Africa’s mass Covid-19 vaccination drive saw the rate of daily inoculations pick up further. While not nearly at the required level, the faster rate of vaccinations is most welcome.”

More than 60,000 people per day were vaccinated between Tuesday and Friday as more vaccination sites were rolled out across the country, the BER said.

“Amid indications of a vaccine shortage, at least for this week, Discovery said that it will not be opening further sites at this stage.”

Read: Unions want tougher lockdown restrictions on gatherings in South Africa

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Latest lockdown a ‘light touch’ from government – but things could still get worse, economists warn