By Siphelele Dludla for IOL
South Africa’s economy shrank by 7% last year compared to 0.2 percent growth in 2019 amid the devastating impact of Covid-19 and lockdown restrictions, Statistics SA said.
This is the most significant economic downturn in 75 years, but was not unexpected following months of economic slowdown due to lockdown restrictions.
’’If we explore the historical data, this is the biggest annual fall in economic activity the country has seen since at least 1946,” Stats SA said.
“The second biggest fall was recorded in 1992 when the economy contracted by 2.1 percent.
“At that time, the country was struggling through a two-year-long recession, mainly the result of a global economic downturn.”
Stats SA said the annual real gross domestic product (GDP) growth rate of -7 percent last year was primarily led by decreases in manufacturing, trade, catering and accommodation; and transport, storage and communication.
The agriculture, forestry and fishing industry, however, escaped the effects of the pandemic relatively unscathed, expanding production by 13.1 percent last year.
The government also grew marginally in the year, up by 0.7 percent.
Stats SA said expenditure on GDP also decreased by 7.1 percent last year as household final consumption expenditure decreased by 5.4 percent.
Meanwhile, the fourth quarter GDP recorded positive growth as economic activity resumed after lockdown restrictions were lifted.
Stats SA said GDP lifted by 1.5 percent in the fourth quarter of last year, giving an annualised growth rate of 6.3 percent, and easily beating market expectations of a 5 percent rise.
The largest positive contributors to growth were the manufacturing, trade and transport sectors.
The manufacturing industry increased at a rate of 21.1 percent in the fourth quarter, as nine of the 10 manufacturing divisions reported positive growth rates in the period.
Stats SA said expenditure on real GDP increased at an annualised rate of 6.5 percent in the fourth quarter of last year as household final consumption expenditure increased at a rate of 7.5 percent.