Economist Azar Jammine has warned against taking the slight improvement in the country’s economy for granted.
The economy recorded a second consecutive quarter of growth in the fourth quarter of 2020 after plummeting in the second quarter during the hard lockdown.
Statistics South Africa’s new figures show that the economy performed better than expected in the fourth quarter last year at a 6.3% annualised growth rate.
Manufacturing, agriculture and construction were the biggest drivers of growth.
Jammine says government should do more to ensure that current economic growth is sustained.
“The important thing to bear in mind is that this revival in economic recovery is not a panacea that will last indefinitely. If we do not address things like corruption, we do not fix our state-owned enterprises, if we don’t get independent power producers to produce electricity, introduce broadband spectrum, improve our educational system and if we do not embark on massive restructural investment and that is a source of job creation, come 2022, our economic growth rate will fall back to what it was. We were already in a recession prior to the onset of the COVID-19 crisis.”
Jammine further outlines what growth means for the economy:
The manufacturing industry increased at a rate of 21.1% in the fourth quarter, contributing 2.4 percentage points to GDP growth.
The trade, catering and accommodation industry increased at a rate of 9.8%, contributing 1.3 percentage points to GDP growth.
The construction industry increased at a rate of 11.2% in the fourth quarter.
The personal services industry increased at a rate of 4.8%, while the agriculture, forestry, and fishing industry increased at a rate of 5.9%.