Covid-19 restrictions to slow GDP recovery and increase debt-trap risk, says Citi

SA’s new restrictions on socioeconomic activity will slow the economic recovery and increase the chances of the economy eventually falling into a fiscal debt trap, according to Citi, one of the world’s top investment banks.

“The government is obviously prioritising the healthcare system, but restrictions like these will absolutely create downside risk to GDP growth,” said Gina Schoeman, SA economist and head of research at Citi, adding that she couldn’t rule out a fiscal crisis in the absence of economic growth...