Rating agency Moody’s has cut South Africa’s growth forecast from 0.7% to 0.4% for 2020, on the back of the global coronavirus outbreak.
“The global spread of the coronavirus is resulting in simultaneous supply and demand shocks,” Moody’s said in a global research report.
This, in turn, will impact South Africa’s growth prospects, it said.
Other economists have forecast similar drops on the back of the virus – particularly due to the impact of the virus on China, where it first broke out.
China is South Africa’s biggest trade partner, and its expected growth of 6% for the year has been forecast to be as low as 4.8% because of the virus’ impact on trade and manufacturing in the market.
According to PwC, for every percent China loses, South Africa could lose 0.2 percentage points to its own growth prospects as a result of its ties to the country.
This is just related to the impact of imports and exports, and not taking into account the effect of a local breakout in South Africa.
South Africa and the coronavirus
South Africa’s government is adequately prepared to contain the spread of the coronavirus, with only a single case confirmed so far, Health Minister Zweli Mkhize said.
A 38-year-old man who traveled to Italy and returned to the eastern port city of Durban via Dubai on an Emirates Airline flight was confirmed as having tested positive on Thursday. The authorities are now tracking down people who were in close contact with the man, who is not showing signs of serious illness.
“South Africans can fight this and can deal with this. It is possible to contain this virus,” Mkhize said Friday in Hilton, northwest of Durban, after meeting with parents from the school that is attended by the infected man’s children. “We are not recommending the closure of schools, the cancellation of matches. We are on top of the situation.”
The school, Cowan House, has been closed and will remain shut for the time being, board member Andrew Barnes said at the briefing.
It took more than two months for the virus to reach South Africa from mainland China where it originated, giving the authorities time to prepare for its inevitable arrival. Globally, the number of confirmed cases is over 100,000, with more than 3,400 people having died.
Nedbank Ltd., one of South Africa’s big-four banks, said one of its Durban-based employees who came in contact with the infected man has been self-quarantined awaiting the results of tests for the disease.
Reporting with Bloomberg