The South African economy finally began its journey to recovery during the third quarter of 2020, after being sent into a tailspin by the national lockdown when it recorded a severe decline of 51%.
During the third quarter, South Africa’s economy rose by an annualised rate of 66.1%, Statistics South Africa (StatsSA) revealed on Tuesday.
Addressing reporters on Tuesday, Statistician General Risenga Maluleke attributed the rebound to the easing of COVID-19 lockdown restrictions.
“All industries recorded an increase in economic activity compared with the second quarter, with manufacturing, trade and mining leading the charge. Businesses were supported by an increase in both exports and household spending,” he said.
South Africa’s GDP grew by estimated 13.5%
During the third quarter, the gross domestic product (GDP) grew by an estimated 13.5%, giving an annualised growth rate of 66.1%.
This follows the significant slump of 16.6% (annualised: -51.7%) in the second quarter during the most restrictive months of the lockdown in April, May and June.
Maluleke said the surge in economic activity in the third quarter may seem impressive, but it comes off the very low base recorded in the second quarter.
“South African industries still have a long way to go before reaching levels of production seen before the pandemic. Despite the rebound, the economy is still 5.8% smaller than it was at the end of 2019,” he said.
Manufacturing, trade and mining are South Africa’s biggest drivers of growth
Manufacturing, trade and mining were the biggest drivers of growth in the third quarter. The manufacturing industry rose at an annualised rate of 210.2%, mostly driven by increases in the production of basic metal products, petroleum, vehicles, and food and beverages.
Stats SA said the mining and quarrying industry increased at a rate of 288.3%, contributing 11.8 percentage points to GDP growth.
“In the third quarter the industry recovered largely on account of the easing of local and global lockdown restrictions. Higher production was mainly due to increased activities in the production of platinum group metals (PGMs), iron ore, gold, manganese ore and diamonds. The trade, catering and accommodation industry increased at a rate of 137.0%,” said the national statistics service.
Increased economic activities were recorded in wholesale trade, retail trade, motor trade, catering and accommodation.
However, said Maluleke, so severe was the impact of COVID-19 in the second quarter that total value added for the industry in the third quarter remained below its level in the first quarter of 2020.
The transport, storage and communication industry increased at a rate of 79.3% as a result of increases in land transport, air transport, transport support services and communication services. – SAnews.gov.za