South Africa economy hit 12-year low in 2020

south africa economy hit 12 year low in 2020

FILE PHOTO: President Cyril Ramaphosa delivers his State of the Nation address at parliament in Cape Town, South Africa, February 13, 2020.<br />REUTERS/SUMAYA HISHAM

South Africa’s economy recorded its first annual contraction in 12 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 7.0 percent in 2020 compared to a 0.2 percent expansion a year earlier, statistics agency StatSA said in a statement.

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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 3.2 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.

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

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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.

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