Economic contraction looks certain for SA

All clubs, restaurants and taverns to close immediately or scale down in war on coronavirus

As the world economy hurtles towards a sharp and punishing recession, economists are slashing SA’s growth forecasts for the year with a full-year contraction for 2020 now almost certain.

With a growing global consensus that the Covid-19 crisis could be deeper than the 2008 global financial crisis, SA’s acutely fragile fiscal position signals grave dangers ahead and is likely to see the debt burden accelerate, tax revenue fall further and borrowing conditions for government and state-owned enterprises become a lot tighter.

Regulations governing SA’s state of disaster have now ordered that all on-consumption premises selling liquor, including taverns, restaurants and clubs, must be closed with immediate effect, or must accommodate no more than 50 persons at any time.

No special or events liquor licences may be considered for approval during the duration of the national state of disaster.

The regulations dictate that all on-consumption premises selling liquor must be closed between 18:00 and 09:00 on weekdays and Saturdays; and from 13:00 on Sundays and public holidays. The regulations were gazetted on Wednesday by co-operative governance & traditional affairs minister Nkosazana Dlamini-Zuma. While’ SAs the most City populous of Johannesburg, city, called on restaurants and bars to cease doing business immediately, the regulations will now give the legal ammunition to cities to take action against institutions not adhering to the new regulations.

The virus, which began in Wuhan, China, has spread to 157 countries. A national state of disaster was declared in SA on Sunday in a bid to curb the growing pandemic.

S&P Global said on Tuesday that it forecast a global recession in 2020, “as the coronavirus pandemic escalates and growth heads sharply lower against a backdrop of volatile markets and growing credit stress”.

The crisis could not come at a

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