South Africa flag
(Getty)
  • New data from Statistics SA show that domestic GDP shrank by 7% last year.
  • This is among the worst contractions in the world, but - given that South Africa had one of the most stringent lockdowns - not as bad as was feared.
  • Also, the fourth quarter looked stronger than expected.  
  • For more articles, go to www.BusinessInsider.co.za.

South Africa’s GDP shrank by 7% last year as the pandemic paralysed the economy for months.

This is among the worst slumps in the world, but better than many expected – including the IMF, which forecast a 7.5% contraction – given that South Africa had one of the most stringent lockdowns in the world.

Also, stronger-than-expected growth in the fourth quarter provided some hope. The economy was 1.5% larger in the fourth quarter than in the third. Fourth quarter GDP was “only” 4.1% smaller than in the same quarter in 2019, while in the third quarter, it was still more than 6% smaller than a year before.

Still, economists believe it may take several years for the economy to recover to pre-pandemic levels.

It will probably not be alone, as many other countries struggle to fire on all cylinders.  

Here’s how South Africa’s GDP slump (-7%) and official Covid death rate (50,803 – or if excess deaths are included, closer to 128,000) compared to others countries:

UK: -9.9% - 125,000 dead due to Covid

Philippines: -9.5% - 13,000 dead

Italy: -8.9% - 100,000 dead

France: -8.3% - 88,600 dead

India: -8% (estimate) - 158,000 dead

Malaysia: -5.6%  - 1,200 dead

Canada: -5.4%- 22,200 dead

Singapore: -5.4%- 29 dead

Germany: -5% - 72,500 dead

Japan: -4.8% - 8,250 dead

Brazil: -4.1% - 266,000 dead

US: -3.5% - 538,000 dead 

Russia: -3.1% - 89,500 dead

Turkey: +1.8% - 29,000 dead

China: +2.3% - 4,600 dead

While most countries - like South Africa - have seen a continued recovery in the fourth quarter of 2020, this was not the case everywhere. In the Eurozone, GDP shrank by 0.7% in the final quarter as renewed lockdowns dampened activity. 

But unlike most countries, South Africa's economy was in recession before Covid.

"Thus the pandemic has simply exacerbated already present structural weakness," says Casey Delport, investment analyst at Anchor Capital.

"Whilst the latest Covid-19 restrictions have since eased, the risk of a resurgence in infections and the reimposition of tighter restrictions remain, especially as South Africa continues to lag wealthier developed nations in launching its immunisation campaign," Delport commented.

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