COVID-19 response shifts to preserving the economy

Next month, Government will shift its response to the COVID-19 pandemic by preserving the economy.

The response also includes developing immediate recovery plans and directing the economy towards growth.

This was revealed by the Finance Minister, Tito Mboweni in a press briefing in which he outlined a R500 billion economic support package.

The package was initially unveiled by President Cyril Ramaphosa during an address to the nation.

Three phase plan

In May, government will focus on three phases.

 The first phase, which the state is currently in, aims to preserve the country’s economy.

The second phase involves a plan, which will be outlined in due course, for the recovery from the immediate effects of the crisis.

Phase 3 is a pivot to position the economy for structurally higher growth.

It will be beaten. Therefore, we must make sure that when we beat it, we do not compromise our long-run sustainability,” explained the minister.

Key levers for economic growth

The National Treasury has proposed a co-ordinated fiscal and monetary policy in response to the pandemic.

Mboweni said government’s response will see Treasury use these policies in a way that delivers an immediate, targeted response.

If wisely used together, these key levers can deliver a counter-cyclical boost directly into the heart of the economy.

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