EKURHULENI, SOUTH AFRICA - JULY 14 Damage at the C
Damage at the Chris Hani Mall in Vosloorus, on 14 July 2021. (Photo by Dino Lloyd via Getty Images)
  • By the last estimate, the economic impact of July's bout of unrest will translate into a R35 billion loss for South Africa.
  • That is the rand effect of S&P's new estimate for GDP growth – assuming there is no more trouble.
  • President Cyril Ramaphosa has cited a cost of R50 billion, based on estimates from property owners.
  • For more stories go to www.BusinessInsider.co.za.

The unrest that saw looting in parts of KwaZulu-Natal and Gauteng in mid-July will cost South Africa an effective R35 billion, according to a new economic estimate – as opposed to some R50 billion cited by the government.

In a report on Monday, ratings agency S&P said it anticipates a hit to gross domestic product (GDP) growth of 0.7%, slowing a pandemic recovery that is, on the other side, bolstered by high global prices for commodities South Africa produces.

But that number is dependent on no recurrence of unrest, S&P said, and fresh instances of trouble could stifle the expected rebound.

Others too expect the economy to largely shrug off the unrest. The price of the rand barely moved as looting broke out, then subsided, and S&P peer Fitch ratings said it was assuming "only transitory macroeconomic effects".

In rand terms, GDP stood at just about R5 billion last year, and the S&P forecast makes for a decline from the previously estimated R209 billion growth for the year to a new number of around R174 billion.

Citing numbers from the SA Property Owners Association, the Presidency previously said some R50 billion in output had been lost due to the riots, with an estimated 150,000 jobs put at risk

Estimates of total GDP for this year have been rapidly adjusted, and the range of expectations remains large, as traders and economists struggle to get to grips with the impact of the pandemic and associated lockdowns all over the world. Fitch adjusted its estimate upwards by 0.6 percentage points – worth some R30 billion – between May and June. 

(Compiled by Phillip de Wet)

Get the best of our site emailed to you every weekday.

Go to the Business Insider front page for more stories.