The last week of violence and unrest will have a significant impact on a South African economy that was already buckling under the strain of a Covid-19 pandemic and lockdown restrictions, say economists at professional services firm PwC.<\/p>\n
In a research note this week, the group said that its calculations show that national GDP growth could be 0.4 percentage points lower this year due to the week of significant disruption.<\/p>\n
Given the loss in potential economic growth, PwC estimates up to 50,000 jobs could be at risk under the baseline scenario.<\/p>\n
However, this number could creep higher in a downside scenario where South Africa’s GDP is even more greatly impacted than expected by the violence.<\/p>\n
“From our perspective, these events essentially placed key areas of the Gauteng and KwaZulu-Natal economies in a virtual level 5 lockdown,” PwC said.<\/p>\n
“Many retail shops were closed, inter-provincial transport ground to a halt; diverse places of work were unable to open as normal, and citizens – afraid for their safety – stayed at home.”<\/p>\n
The group cited data from Google which shows that workplace activity in KwaZulu-Natal was 21% lower on Friday (9 July) compared to the pre-pandemic period, versus a figure of just 14% a week earlier before protests started.<\/p>\n
It added that residential activity was 24% higher on protest-hit July 9 versus the pre-pandemic period compared to a figure of 20% on 2 July as more people stayed home amidst transport and commercial disruption.<\/p>\n
The loss of jobs will add to the mounting pressure seen in South Africa, with some analysts<\/a><\/strong> pointing to the already high unemployment rate as one of the catalysts behind the looting and violence.<\/p>\n Data published by Nedbank this week shows that while some 847,000 people had found employment since April last year, the economy is\u00a0still short a massive 1.4 million jobs<\/strong> compared to Q1 2020 before the pandemic struck.<\/p>\n Added to this bleak reality, the number of discouraged workers \u2013 those who have stopped looking for work altogether \u2013 has increased throughout the pandemic rising to\u00a03.1<\/strong>\u00a0million<\/strong>\u00a0in Q1 \u2013 the highest level since the Labour Force Survey started just over 12 years ago.<\/p>\n
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