Trade and Industrial Policy Strategies' (TIPS's) 'Tracker: The economy and the pandemic' highlights important trends in the Covid-19 pandemic in South Africa and how they affect the economy.
The rate of transmission of Covid-19 has continued on a secular upward trend, but the increase has been both slow and unpredictable. The long holiday weekend around Heritage Day on 24 September appears to have fuelled an uptick a week later.
The rate of transmission depends largely on the extent to which public health authorities are able to convince people to wear masks and avoid social gatherings, whether in homes or businesses.
Overall, excess deaths during the Covid-19 pandemic seem likely to be the largest single source of natural deaths in South Africa this year. For comparison, Covid-19 is now estimated as the twelfth-largest cause of death globally, but ranks first in New York, Brazil and Peru, second in the UK, and third in Sweden.
ON THE ECONOMY
In a pattern seen worldwide, the recovery has taken a “swoosh” shape, with a relatively sharp rebound in April and May fading into a more gradual improvement over the past four months. Breakdowns in Eskom plants remain a binding constraint, with a downturn in electricity sales in September.
As usual with economic and natural disasters, damage from the pandemic is falling disproportionately on the poorest communities and households. Employment data for the second quarter show that job losses were highest for lower-skilled, lower-income and informal workers. These groups will also be hard hit by the termination of the Covid-19 special grant and the supplement to other social grants, currently due to end on 15 October.
*Since the pandemic and the economy have stabilised, this will be the last Tracker. TIPS will continue to publish periodic in-depth analyses of developments and debates around recovery and reconstruction. Its quarterly Real Economy Bulletin will also include a section on the impact of the pandemic on the economy.