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

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