The steep contraction of South Africa’s Quarter 2 Gross Domestic Product to record levels of 16.4% annualised to 51.2% as a result of COVID-19, raises the risk of reaching the Supplementary Budget forecast of -7.2% growth in 2020.
This, the government said in a post-Cabinet statement, affirms the correctness of its decision to urgently embark on an economic recovery plan. The recovery plan will see the government working together with its social partners to get the economy on a better growth trajectory.
“The plan, which will be infrastructure led, will also include implementation of much-needed structural reforms,” reads the statement.
This week President Cyril Ramaphosa said having acted swiftly and decisively to save lives and bring the COVID-19 epidemic under control, the government’s focus now is on economic recovery.
He said the government’s social partners would soon present a Social Compact on Economic Recovery to the President following discussions at the National Economic Development and Labour Council. This social compact identifies areas of convergence, and provides a basis for joint action by all partners.
Government will thereafter finalise its Economic Recovery Strategy, which will draw on this social compact and outline a clear, action-oriented plan to stimulate economic growth and enable a rapid rebound.
Finally, the Presidential Employment Stimulus will commence implementation within the next month, and will expand opportunities through public and social employment to counteract job losses, said the Presidency.
While further announcements in this regard are expected in due course, the President has called on all sectors of society to act with unity and purpose to rebuild the economy for the benefit of all South Africans.
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