SA economy plunges 51% in Q2

Mfuneko Toyana - South African economic output shrank 51.0% in the second quarter, its fourth quarterly contraction in a row and its largest on record, as a strict lockdown to curb the spread of the coronavirus shut down most activity, data showed yesterday.Africa's most industrialised nation has been hit hard by the Covid-19 pandemic, recording the seventh-largest number of cases worldwide, although it has seen fewer deaths than some other badly affected countries.Analysts polled by Reuters had predicted a 47.3% contraction in quarter-on-quarter terms because of the lockdown restrictions, which were among the harshest in the world."This is the first time in history that the South African economy has contracted for four straight quarters," statistician-general Risenga Maluleke told a news conference.Joe de Beer, another top official at Statistics South Africa, said that after adjusting for inflation the economy was roughly the same size in the April-June quarter as in the first quarter of 2007.SectorsMost sectors declined steeply except for agriculture, which grew 15.1% thanks to exports, mainly of fruits and nuts, and better-than-average winter rainfall.Mining declined 73.1%, manufacturing 74.9% and construction 76.6%. Gross domestic product for the whole economy shrank 17.1% from the same period in 2019.Jeff Schultz, economist at BNP Paribas, said the global impact of the pandemic coupled with the recent return of power cuts by ailing state utility Eskom would hamper any economic recovery. "It will take a very long time to get to pre-pandemic levels," he said.‘Dwarfs slowdown’The government expects an economic contraction of at least 7% in 2020.South Africa's economy was already in recession - its second in two years - when it was hit by the virus and had shrunk by 2% during the first three months of this year.The second-quarter contraction "dwarfs the annualised slowdown of 6.1% recorded in the first quarter of 2009 during the global financial crisis," the statisticians said. – Nampa/Reuters/AFP

SA economy plunges 51% in Q2

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