This archive report was first published on 24 June 2020.
South Africa's economy is facing its worst slump in 90 years, with a projected 7.2% contraction in 2020, according to Finance Minister Tito Mboweni.
Presenting a supplementary budget in parliament on June 24, 2020, Mboweni said the pandemic had pushed the country's consolidated budget, including debt servicing costs, to a record of more than two trillion rand.
He compared public debt to a 'hippopotamus... eating our children's inheritance', highlighting the country's growing financial burden.
South Africa has the highest recorded number of coronavirus infections in sub-Saharan Africa, with 106,108 cases, including 2,102 fatalities.
The country's economy, the most developed in the continent, had already slipped into recession in the final quarter of 2019 before the virus arrived.
President Cyril Ramaphosa imposed a strict lockdown on March 27, which has gradually been eased in phases since May 1 to allow economic activity to pick up.
The lockdown pushed the annual rate of inflation in April to a 15-year low of 3 percent, pulled down mainly by an 11.1-percent drop in fuel prices.
However, the country's unemployment rate rose to a record high of 30.1 percent in the first quarter of 2020, according to statistics boss Risenga Maluleke.
Commerce and industry experts have warned that the unemployment rate could rise as high as 50 percent due to the pandemic.
The government released 500 billion rand ($28.7 billion, 25.5 billion euros) in an economic and social relief package targeting health, social grants, and subsidies for companies in April.
Part of the coronavirus relief aid will be sought from the International Monetary Fund (IMF), World Bank, and the African Development Bank (AfDB), Maluleke said.
Professor Raymond Parsons warned that the country 'has to break out of its low-growth trap without falling into a debt trap', highlighting the need for a balanced approach to economic recovery.
