Third wave: harsher restrictions unlikely, say economists
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AS A “third wave” of Covid-19 infections seems to be inevitable, on Friday, economists were confident that the government would not implement harsher restrictions as the economy cannot afford stricter lockdowns.
This week, there was a 46 percent increase in the number of cases. On Thursday, new cases breached the 3 000 mark of daily infections for the first time in months.
Investec chief economist Annabel
Bishop said the strength of the economic recovery would depend on the severity of the lockdowns and the pace of the regulatory reforms.
“We are not expecting the exceptionally severe lockdown levels of 4 and 5 to be repeated, but a manifestation of a rapid climb in the seven-day rolling average of new cases would be alarming for the government and would likely see some restrictions tighten,” she said.
Bishop said the vaccination rollout had been slow, which heightened the risks related to the pandemic.
This week, the Cabinet extended the State of National Disaster by another month, until June 15.
On Friday, Health Minister Dr Zweli Mkhize said it was concerning that the number of positive cases was increasing. “We must ensure that there is a strong response to this,” Mkhize said.
“(However) when we talk about the ‘third wave’ as a technical definition, we have not reached that point.”
The business sector has urged the government to ensure evidence remained the key guide to lockdown interventions.
South Africa’s Phase 2 of Covid19 vaccination drive is set to begin tomorrow, parallel with Phase 1 which should come to an end soon after more than 460 000 health-care workers were vaccinated.
Anchor Capital investment analyst Casey Delport said the threat of a third wave on expected economic recovery was concerning.
The economy is expected to rebound between 3.4 and 3.8 percent this year, following a severe 7 percent contraction last year.
Delport said of concern would be the effect further restrictions would have on unemployment, bearing in mind the jobless rate of 32.5 percent. She said the effects of the first two waves would be felt for a long time.
“The economy is not in a position where we can afford the harsher restrictions experienced under the previous higher lockdown levels,” Deport said.
“The government no longer has any fiscal flexibility to provide the type of support that it has provided over the past year- the runway for the UIF and TERS schemes… have effectively run out.”
BUSINESS REPORT ONLINE