SA economy ‘hits rock bottom’ as it shrinks by half
Chief economist at Econometrix Azar Jammine says he believes the economy will recover despite a fourth consecutive quarter of negative growth.
The country’s gross domestic product (GDP) contracted by 51% in the second quarter of 2020 amid the Covid-19 lockdown.
Stats SA released the latest GDP figures at its headquarters in Pretoria on Tuesday.
Jammine says even though the numbers aren’t promising, the economy is not a write-off just yet.
“Certainly, the economy will recover from now on. I think we’re already seeing it recovering. We haven’t seen the third quarter figured but they will show a recovery.
“With the lifting of restrictions, one has seen a rebound in some form of economic activity. The challenge though is to get the activity back to where it was before the Covid-19 virus. Unfortunately even that was not a great example to use because the economy had been in decline for a decade consistently preceding the Covid-19 virus,” he explains.
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Covid-19 lockdown sees GDP plunging by 51%
The latest Gross Domestic Product (GDP), released on Tuesday, covers the period of the level 5 and 4 lockdown restrictions. The lockdown was imposed by government in an attempt to limit the spread of Covid-19. Stats SA released the latest GDP figures at its headquarters in Pretoria on Tuesday.
Jammine admits a recovery might take some doing.
“Without a doubt this is a rock bottom for South Africa and I think we will see some recovery in the third quarter, but I think the challenge will be how far below levels that prevailed prior to the onset of the Covid-19 virus can we actually ascend.
“Unfortunately, here one doesn’t have confidence that we will get back to where we were prior to the Covid-19 virus before at least 2023 or 2024.”
The latest figures show that the only positive contributor was the agriculture sector, which showed growth of 15,1%.
“The agricultural sector has been doing relatively well because decent rains that we had last summer and we’ve had fairly high maize crops,” says Jammine.
Manufacturing contracted by 74.9% in the second quarter, with all ten manufacturing divisions reporting a negative growth rates.
