The South African Property Owners Group (SAPO) estimates the recent unrest in South Africa could cost the country’s economy 50 billion rand (2.9 billion USD) in the gross domestic product (GDP).
And a leading economist says the impact of the riots and the damage they caused to the country’s retail and manufacturing sectors could severely impact South Africa’s economy in the coming years.
161 shopping malls, eight factories and 11 warehouses all suffered extensive damage.
“This is the direct impact of last week, this does not include the future damage to the economy. It will be significantly higher,” Senior Economist at Efficient Group Dawie Roodt said.
“Over time, the damage will be seen in weaker economic growth, but the way GDP is calculated, it will not reflect in the next economic data straight away. What is going to happen to the GDP going forward is that GDP in future would be between half and full percent lower than it would have been previously,” he added.
A number of economic organizations were projecting the growth to be at over 3 percent in 2021 after it contracted by 7 percent in the previous year due to poor growth and lockdown measures.
eThekwini Economic Development and Planning Committee said after the riot, over 50,000 informal traders have lost their livelihoods, approximately 1.5 million people have lost their potential to earn an income and there are some 150,000 jobs at risk.