September 5, 2022

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Innovation Leader

What to expect from the next Covid wave and lockdown restrictions: Absa

While the Covid-19 risk has diminished in South Africa, it has not disappeared, and a resurgence of cases in recent weeks could weigh on the economy this year, say economists at Absa bank.

“New Covid-19 cases are again on the rise, with the positive test ratio reaching 21% on 27 April, the highest level since early January,” the bank said in a research note on Tuesday (3 May).

“While we believe the government will not look to tighten lockdown restrictions, a surge in Covid-19 cases could still moderately weigh on economic activity via the confidence channel and delay the recovery in tourism-related industries.”

Internationally, the Russo-Ukrainian war and China’s ‘zero-Covid’ lockdowns will likely dampen global growth momentum and exacerbate supply chain pressures on growth domestically.

  • Absa’s baseline scenario assumes there will be bouts of Covid-19 but with no material retightening of lockdown restrictions;
  • Its upside scenario assumes any further waves of Covid-19 only have a marginal impact on the country;
  • Its downside scenario forecasts that further waves will lead to the reintroduction of social distancing lockdowns, but with significantly less economic impact than in 2020.

South Africa reported 3,785 new cases on Tuesday (3 May), representing a 17.6% positivity rate after 21,518 tests were conducted in the previous 24 hours. Most new cases reported are from Gauteng (45%), followed by KwaZulu-Natal (28%).

An increase of 68 hospital admissions was reported in the past 24 hours, with 2,232 currently admitted across public and private healthcare clinics.

In a media briefing on Friday (29 April), health minister Joe Phaahla said the government would likely need a further week of data to confirm the start of the fifth wave officially and that the recent uptick in cases is not anomalous.

Previous forecasts had pointed to a fifth Covid wave beginning in South Africa from mid-May.

“What is also uncertain from our scientists is (that) we have always been told that when a new wave comes, it is driven by a new variant and at this stage, we have not been alerted of a definite new variance except changes in the Omicron variant,” he said.


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What to expect from the next Covid wave and lockdown restrictions: Absa