South Africa’s economy has shrunk by 51% in the second quarter of 2020.
Statistics South Africa released the data today.
In the statement, the organisation describes this as a severe punch in the gut.
“Perhaps the second quarter of 2020 will become known as the pandemic quarter. South Africa’s economy suffered a significant contraction during April, May and June when the country operated under widespread lockdown restrictions in response to COVID-19.”
The organisation says the Gross Domestic Product (GDP) fell by just over 16% between the first and second quarters of 2020, giving an annualised growth rate of ‑51%.
“This contraction dwarfs the annualised slowdown of 6.1% recorded in the first quarter of 2009 during the global financial crisis. Historical data from 1960, sourced from the South African Reserve Bank, show that the second quarter of 2020 experienced the biggest fall in GDP since that year, far steeper than the annualised 8.2% decline in the fourth quarter of 1982.”
Nearly all industries experienced a massive drop in output in the second quarter of 2020. The construction industry was hardest hit, slumping further by 76.6%.
It was already in bad shape before the pandemic. This was the sector’s eighth consecutive quarter of economic decline.
Manufacturing output shrank by 74.9% due to work stoppages and low demand for steel.
The ban on alcohol sales is said to have also had a heavy impact on the food and beverage division of manufacturing.
Expenditure on GDP tumbled by 52.3%. Falling exports and household spending are cited as reasons for this.
Economists had been expecting the slump with Chief Economist at Efficient Group Dawie Roodt earlier telling SABC News that they expected it to be the country’s biggest drop in history.
Analysis of SA economy during COVID-19 pandemic: