July 5, 2022

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3% contraction of the economy expected following the riots

Following the riots that killed about 215 people in ten days, Wall Street Investment Bank said growth would be severely compromised. J.P. Morgan. The economy will experience a 3% contraction in the third quarter as it gradually begins to recover from the crisis.

July riots following the imprisonment of a former president Jacob Zuma, The worst thing that could happen to South Africa after the devastating impact of Govt-19, which caused the economic downturn. In fact, according to J.P. MorganThe continent’s GDP contracted by 3% in the third quarter, after Egypt overtook it last year.

Following imprisonment Jacob Zuma, Riots erupted in several regions of the Rainbow Nation, which has the most industrialized economy on the continent. Hundreds of businesses were completely destroyed in the riots that killed 215 people Cyril Ramaphosa They were called the worst events in post-apartheid South Africa.
This is why the US Investment Bank revised its forecasts for the country because “a wave of violence and looting shook the two provinces of Kuteng and KwaZulu-Natal (KZN), which represent more than half of South Africa’s GDP,” Sonja Keller told clients. J.P. Morgan.

“The disruption of the supply chain is further exacerbated by the suspension of state-owned logistics company Transnet and the country’s largest crude oil refinery, Supref, in the port branch of KwaZulu-Natal,” she continued.

For the year, growth should now be 4.5% against 4.9% in the previous forecast J.P. Morgan This is very hopeless Deutsche Bank This year’s riots were estimated to cut South Africa’s economic growth by 0.8%.

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