CAPE TOWN - Economist Dawie Roodt has given his insights on how the coronavirus has impacted the global economy.
Roodt was invited on Jacaranda FM on Tuesday morning. He spoke on "Breakfast with Martin Bester" and illuminated South Africans on the markets crashing due to coronavirus.
It has been estimated by a number of UN economists that the coronavirus and its continuing outbreak may cost the global economy between $1- and $2-trillion this year.
It has also been suggested that a number of developing countries will be forced into a recession. The South African economy contracted by 1,4% in the fourth quarter of 2019, following a contraction of 0,8% (revised) in the third quarter. Transport and trade were the main drags on overall activity, according to the latest gross domestic product (GDP) figures.
RAND CRASHES
This morning the rand nearly crashed through the R17/$ barrier. The rand was trading at R15.84 to the dollar by 11:30 today.
Roodt told Jacaranda FM listeners that, "financial markets are very uncertain at the moment. Our rand can lose some more value. The oil price is also currently going down".
"Most of the bad news are already in the market already. At the end of this month Moody’s will decide if they will downgrade South Africa or not. Your pension fund could be down 10%. Do not panic though! Have a proper retirement plan in place, stay where you are, sit on your hands."
Roodt also said that he expected a number of governments to implement spending plans to tackle the effects of the coronavirus this week.
The rand is generally a barometer for international fear around market volatility, Roodt said. "The rand is under pressure and we can see that", he added.