More eyes on COVID-19: Perspectives from Economics: The economic costs of the pandemic – and its response

From an economics perspective, the COVID-19 shock is unprecedented and very different from other global financial shocks For the first time since the 1918 Spanish flu epidemic, the South African economy has been hit by real supply and demand shocks that have struck both domestic production and global supply chains, and simultaneously depressed demand in both the domestic and global economies Lockdown halted consumption to promote social distancing Productive activities in most sectors ceased with consequent loss of jobs, workers furloughed or salaries cut--all of which induced a massive demand shock and loss of business and consumer confidence There is a very real danger that these shocks to the real economy will morph into a financial crisis at a time when the South African economy has already been bedevilled by a secular decline in output growth, high unemployment, precarious informal sector livelihoods, abject poverty and obscene inequality Here, Ajam talks about the economic costs of the pandemic