South Africa’s economy contracted by 1.5% in the third quarter of 2021.
According to Stats SA, this was mainly due to tighter COVID-19 lockdown restrictions and the civil unrest in July.
A double blow: civil disorder and lockdown
In its statement, Stats SA says six of the ten industries recorded a decline in production in the third quarter.
Agriculture, trade and manufacturing were the hardest hit.
The agriculture industry recorded its biggest drop in production since 2016, contracting by 13.6%. Together with a decline in the production of animal products, the industry in KwaZulu-Natal was dealt a major blow by the civil disorder in July. Maize, citrus and sugarcane farms recorded losses from fires set during the upheaval.
The trade industry shrank by 5.5%, with all trade sectors reporting losses. Widespread looting in Gauteng and KwaZulu-Natal also affected wholesale, retail and motor trade, with retailers being the most affected.
The manufacturing industry declined by 4.2%, dragged lower in the main by the civil disorder and global shortages of raw materials.
Stats SA further said: “Four industries managed to keep their heads above water. The finance industry increased economic activity by 1.2%. Personal services saw an uptick in economic activity on the back of increased spending on private healthcare and the roll-out of COVID-19 vaccines for those aged between 18 and 35 years. General government expanded by 0,4%, attributed to a rise in employment in local government and extra-budgetary accounts and funds.”
Household spending and exports drive down expenditure on GDP
Household final consumption expenditure decreased by 2.4%. The looting and closure of retailers in KwaZulu-Natal during the civil disorder resulted in food shortages as many consumers struggled to buy basic supplies.
The Adjusted Level 4 lockdown restricted trading hours and limited restaurant activity.
Ziviwe Bubu, Senior Sales Trader at Nedbank takes a look at the GDP numbers:
The document below is Stats SA’s full report on the country’s GDP performance in the third quarter of 2021: