Covid-19 has wiped out a third of South Africa’s middle class

A recent study has highlighted the devastating impact the Covid-19 pandemic and subsequent economic turmoil has had on the people of South Africa.

The study by United Nations Development Programme (UNDP) on the socio-economic impact of Covid-19 in the country highlights the following:

• The country’s overall GDP is expected to decline by at least 5.1% and up to 7.9% in 2020
• The number of households below the poverty line will increases as households fall from the lower-middle class into vulnerability
• 54% of households that have been pushed out of permanent jobs to informal or temporary contracts are likely to fall into poverty
• As many as 34% of households are likely to exit the middle class
• The real average monthly take-home pay in the private sector is R14 197, according to BankServ
• The vast majority of South Africans operate in an informal sector, with salaries closer to R6 000 per month
• South Africa’s minimum wage is around R3 500 per month
• South African households were already getting poorer thanks to rising food prices and the general cost of living
• The middle-high to high-income category only makes up 2.5% of the South African credit active population
• Middle income made up 9.3% of the credit active population
• 55.5% of South Africans live below the national poverty line, but that number is likely to grow