Readers’Views
WRITE TO: PO BOX 1742, Saxonwold 2132. SMS: 33971 E-MAIL: letters@businesstimes.co.za.
Post-coronavirus SA will see recession of epic proportions
The article “Covid-19: Worst still to come” (March 29) refers. Any economist who says our GDP is going to shrink by only a few percent is seriously in denial.
With the lockdown, the economy is operating at 50% at best. Manufacturing: 0%. Mining: almost 0%. Tourism: 0%. Retail: maybe 40%. Government: 30%.
The list goes on.
And if and when we go back to business as usual, it will be slow, digging our way out of this one.
When the lockdown is lifted, we will gradually recover, but thousands of businesses will have folded.
We’re talking a recession of epic proportions here, with GDP down 25% for the year.
Robert Breyer, on businessLIVE
Sadly, the government has no capacity to provide stimulus packages to companies, and we have a triple whammy now with the coronavirus, slow economic growth and the severe devaluation of the rand, which will see products and services rise beyond the affordability of most South Africans.
More folks are going to be out of a job in 2020!
JJ Lee, on businessLIVE
If any of the negative prophecies result in the replacement of the ANC by the IMF, that could be regarded as a counterbalancing positive.
Bring it on!
Geoff Smailes, on businessLIVE
We can thank ANC for downgrade
The Moody’s downgrade is a fitting response to the ANC’s inability, unwillingness or both to implement the structural reforms that everyone knows have to happen for the economy to have any hope of recovering.
This regime is irredeemably corrupt and incompetent, something that Moody’s has been forced to recognise after giving it umpteen benefits of the doubt.
SA only has the ANC regime to blame for the status of junk. Antipoliticalcorrectness Antip, on businessLIVE
Moody’s did not speak in tongues. It downgraded SA because of low economic growth. In other words, it looks at macroeconomic factors, not microeconomic factors.
I am aware that there are those who think that, if we reduce public servants’ salaries and allowances, rating agencies will change their minds. This is false.
The agencies will do so if we reduce public debt and expand our revenue base — not by increasing tax rates — and by adopting economic policies that encourage investment, not just foreign but also internal.
If we can do these few things, which are important macroeconomic factors for growth, we will be on the right track towards recovery.
Retrenching workers and reducing allowances will never result in a positive impact on the economy.
This will, in fact, increase the number of people who are dependent on government social support programmes, reduce the number of taxpayers, which will shrink the tax base, and force rating agencies to downgrade SA to the next lowest investment rating possible.
Michael Mara, on businessLIVE