IMF Loans South Africa $4.3 Billion... "Largest Single Pandemic Financial Support"

[Image source=EPA Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] South Africa, the country hardest hit by the novel coronavirus disease (COVID-19) in Africa, will receive $4.3 billion (approximately 5.13 trillion KRW) in emergency financial support from the International Monetary Fund (IMF). This is the largest single pandemic financial support provided by the IMF.

According to Bloomberg News and others on the 27th (local time), the IMF announced in a statement that it decided to provide financial support to South Africa, saying, "This is to support the authorities' efforts to cope with the difficult health situation and the severe economic impact caused by COVID-19." The IMF added, "It is necessary to ensure debt sustainability after the pandemic, implement structural reforms for recovery, and achieve sustainable and broad-based growth."

According to statistics from Johns Hopkins University in the U.S., South Africa ranks fifth in the world for the highest cumulative number of COVID-19 cases, following the United States, Brazil, India, and Russia. As of the morning of the same day, South Africa's cumulative confirmed cases exceeded 452,000. Due to lockdown measures to prevent the spread of COVID-19, South Africa's gross domestic product (GDP) is expected to decrease by 7.2% this year.

The South African central bank stated that the country had been trapped in the longest economic downturn cycle since World War II even before COVID-19, and it predicted that GDP would decline by more than 30% in the second quarter of this year. South Africa's government debt is expected to reach about 90% of GDP in 2023-2024, and the fiscal deficit this year is also projected to increase to a record high.

Accordingly, international organizations are providing support to South Africa. In addition to the IMF, the World Bank (WB) has provided $2 billion, the BRICS New Development Bank (NDB) $1 billion, and the African Development Bank (AfDB) $300 million to South Africa. South Africa is regarded as the most industrialized country in Africa. Bloomberg reported that the total financial support the IMF has provided to Africa so far exceeds $18 billion.

This content was produced with the assistance of AI translation services.