Consultant Capital Economics today considered that the violence in South Africa should lead to a slowdown in economic activity, mainly due to the combination with the containment measures to contain the covid-19 pandemic.
“We think there will be a modest slowdown rather than a drop in economic activity and even then this will mainly reflect the impact of the third wave of covid-19 and the deepening of measures to contain the virus, rather than social unrest,” write analysts at Capital Economics.
In a note on the South African economy, sent to clients and which Lusa had access to, British analysts underline that the greatest impact of the violence that has swept the country will focus on the country’s budgetary position.
“Public finances were in a bad state at the start of the pandemic and, although the impact was not as severe as initially thought, the public accounts deficit was still 11% of GDP in the last fiscal year and the debt soared to 78 .8% of GDP, which led the Government to impose harsh austerity measures, with the freezing of civil servants’ salaries for three years,” they point out.
South Africa has seen a wave of violence following the arrest of former President Jacob Zuma, but the current President has singled out economic difficulties as the main reason for the protests, with the economy 3.7% below pre-pandemic levels. , and unemployment rising to over 30%.
“There is clearly great uncertainty regarding the unrest in South Africa and how this will evolve, with the main risk being the fragile state of the economy, which limits the Government’s ability to implement austerity measures and put public debt on a trajectory sustainable,” analysts conclude.
According to an official report, at least 117 people were killed – including 91 in Kwazulu-Natal – and more than 2,000 arrested during those six days of violence, according to official data.
The incidents began last week, a day after former President Jacob Zuma was arrested and sentenced to 15 months in prison for contempt of court.
After the arrest, the country plunged into a series of protests and looting unprecedented in the country’s recent history.
It is estimated that around 450,000 Portuguese and Portuguese descendants live in South Africa, of which at least 200,000 in Johannesburg and Gauteng, and 20,000 in KwaZulu-Natal, but according to the Portuguese adviser there are no nationals among the victims.
South Africa, the most affected country on the continent by the pandemic of covid-19, accounts for more than 2.2 million cases of infection, which resulted in more than 65,000 deaths.
Source: Futebol 365 – Notícias by www.futebol365.pt.
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