Money and Markets

Here’s how SA's economic recovery from the pandemic compares to the rest of the world

Business Insider SA
JOHANNESBURG, SOUTH AFRICA - MAY 10: A general vie
Sunrise in Johannesburg.

  • South Africa’s economy has bounced back in the third quarter – but it is still 6% smaller than a year ago.
  • Other countries – like the UK, Spain and Mexico – saw much bigger year-on-year declines as the global pandemic hit economies.
  • In SA, only agriculture and the government sector are on track to grow this year.
  • For more articles, go to www.BusinessInsider.co.za.

On Tuesday, Statistics South Africa released a monster economic growth number: the local economy grew by 13.5% compared to the previous quarter. This followed a 17.5% contraction in the second quarter (at the height of lockdown).

Manufacturing, trade and mining all saw strong growth, with South Africa still on track to deliver its best year ever for exports, largely thanks to commodities and fruit.

There was also a notable jump in construction works, after eight straight quarters of contractions, says Momentum economist Sanisha Packirisamy, economist at Momentum.

In fact, every sector saw growth, contributing to an impressive bounce back by South Africa, says Stanlib economist Kevin Lings.

Not all countries managed to grow in the third quarter as the pandemic continued to wreak havoc on livelihoods and businesses - India, for example, suffered two straight quarters of declines.

Still, the latest GDP data shows that the South African economy in the third quarter was still 6% smaller than a year ago.

Here’s how much other countries’ economies shrank over the same period:

Philippines -11.5%

UK -9.6%

Spain -8.7%

Mexico -8.6%

India - 7.5%

Thailand – 6.4%

Italy -4.7%

France -4.3%

Germany -4.2%

Brazil -3.9%

Russia -3.6%

US – 3.5%

Indonesia -3.5%

Poland -2.0%

South Korea -1.3%

Sources: BloombergReuters, CNBC, Icis, Bangkok Post, Nikkei Asia

So far this year, the South African economy contracted by 7.9% compared to the same period last year – and that comes after years of stagnant growth. It looks like only two sectors – agriculture and government – managed to grow this year.

The economy looks set to grow next year, but it may be years before South Africa recovers from the Covid hit.

“We are pencilling in a shallow recovery of 2% in 2021, as an increase in the number of business closures, persistently higher levels of unemployment, fiscal stress and ongoing challenges to electricity supply detract from the expected upturn,” says Packirisamy.

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