Economy shrinks by 7% in 2020

South Africa could not escape the chokehold of COVID-19, with economic growth shrinking, as expected, by 7 percent last year. Courtesy of #DStv403

JOHANNESBURG - The country's economy experienced some positive growth in the last three months of 2020.

It could not escape the chokehold of COVID-19, with economic growth shrinking, as expected, by 7 percent last year.

READ: SA economy hit 11-year low in 2020

Statistics South Africa says the easing of lockdown restrictions helped bolster fourth-quarter growth, with better than expected figures in the manufacturing, construction and trade sectors.

Data shows however that the country's weaker economy continues to be outpaced by population growth.

Citizens have been getting poorer on a per capita basis.

READ: Zimbabwe lockdown: Cross-border traders starving

Analysts say structural reforms such as reliable electricity, spectrum availability, and labour laws are needed sooner than later.

"We shouldn't get too excited, but this year we are going to see a really good year but it is going to be a base effect it's not going and it's not because we addressed the structural issues," Maarten Ackerman said.

"All the structural issues that are currently in the pipeline, it's taking a little bit longer for various reasons, it's policy uncertainty, it might also be political gridlock, but whatever is happening on the ground right now, we are not going to see in the next quarter or two. We are probably going to see that in the numbers and the years to come because it is long term changes that we are making."

Source
eNCA

Paid Content