Answer to Question #231479 in Macroeconomics for Yoza

Question

Discuss the economic effects of covid 19 on employment, output and inflation in south africa

Answer 1

The outbreak of the COVID-19 pandemic has caused significant disruption to economic activity, causing an unprecedented decrease in employment, especially in South Africa. Three workers who were employed before COVID-19 have lost their jobs due to lockdown or did not receive their salaries in April 2020, while informal workers are at higher risk because they rely on daily sales for their earnings.

Restriction on mobility, workplace and market closure, the suspension of some activities and reduction in demand for goods and services has led to a slowdown in production output, causing a reduction in working hours.

Before the occurrence of COVID-19, the inflation rate in South Africa was expected at 4.7 percent. As of June 2020 and 2021, the inflation rate was revised to 5.2 percent and 4.6 percent, respectively, after the fallout of the coronavirus outbreak. The projection was made under the assumption of a worst-case scenario, whereas the previous outlook was at five percent before the pandemic.