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South Africa’s GDP expands in Q4 but records big 2020 contraction

Reuters
South Africa’s GDP expands in Q4 but records big 2020 contraction

TRAVEL SLUMP. A passenger is seen at the self-service check-in counter at the OR Tambo International Airport in Johannesburg, South Africa, December 22, 2020.

Photo by Siphiwe Sibeko/Reuters

South Africa registers its biggest drop in annual gross domestic product since 1946

South Africa’s gross domestic product (GDP) grew quarter on quarter in the 3 months ending in December, led by expansion in manufacturing, construction, and trade, but the economy recorded its biggest annual contraction in 7 decades in 2020.

South Africa’s economy, which was in recession before the COVID-19 pandemic, deteriorated sharply last year after the government imposed a strict lockdown to curb the spread of the coronavirus.

Statistics South Africa (Stats SA) said on Tuesday, March 9, GDP expanded by 6.3% quarter on quarter on a seasonally adjusted and annualized basis in the 4th quarter following a revised 67.3% expansion in the 3rd quarter.

However, the economy contracted 7% in the 2020 calendar year compared to 0.2% growth in 2019. This was the biggest drop in annual GDP since 1946, said Mike Manemela, head of economic statistics at Stats SA.

On a quarter by quarter basis, manufacturing jumped 21.1%, construction was up 11.2%, and trade rose 9.8%.

GDP contracted by 4.1% in the last quarter of 2020 on a year on year basis, compared to a revised 6.2% contraction in the prior quarter.

The coronavirus lockdown has since been eased, but the risk of a resurgence in infections and reimposition of tighter restrictions remain as the country lagged wealthier Western nations in launching its immunization campaign.

The government is yet to step up its vaccination program, which was launched last month with the administering of Johnson & Johnson doses to health workers as part of a research study. – Rappler.com

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