SA economy hit 11-year low in 2020

JOHANNESBURG - South Africa's economy recorded its first annual contraction in 11-years in 2020 due to the pandemic but it extended its rebound in the last quarter, official data showed Tuesday.

The country's gross domestic product shrank by seven-percent in 2020 compared to a 0.2-percent expansion a year earlier, statistics agency StatSA said in a statement.

The drop was "primarily led by decreases in manufacturing, trade, catering and accommodation," it said.

It was the first recession since 2009 when GDP fell by 1.5-percent.

But the economy - already in recession when it was hit by the virus - showed signs of resilience despite COVID-19 restrictions and grew by 1.5-percent in the final quarter of 2020, with annualised growth of 6.3-percent.

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The GDP growth between October and December was driven mainly by a boom in the manufacturing and trade sectors, said StatSA.

It is an extension of a recovery that started in the third quarter - when it posted a 13.5-percent quarter-on-quarter growth - after the pandemic handed Africa's second-largest economy a record slump.

In annualised terms, the statistics agency's preferred measure, third-quarter growth reached 66.1-percent, after falling back by 51.7-percent between April and June.

The economy picked up pace in the third quarter when containment measures were loosened following falling infection numbers.

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A resurgence of infection fuelled by a more contagious variant of the coronavirus meant a reimposing of some of the restrictions but industries put up a brave face.

Sectors such as the hospitality and tourism industries were hardest hit as a night-time curfew and alcohol ban forced restaurants to close early.

The government imposed a strict lockdown in late March to stymie the rising virus cases, but it also stifled the economic outlook.

Africa's most industrialised nation has counted more than 1.5-million cases of COVID-19 of which slightly over 50,000 have been fatal, representing nearly half of the total deaths on the continent.

Source
AFP

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