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· South Africa’s economy contracted for the first time in 11 years in 2020, according to official data released by the government. Corona virus lockdowns hampered the economy by disrupting demand and supply chains as also the production processes and output
· Gross domestic product declined by 7%, compared with a 0.2% expansion in 2019, says a report released by Statistics South Africa Tuesday
· This is the first annual contraction since 2009 when GDP fell 1.5%
South Africa’s economy contracted for the first time in 11 years in 2020, according to official data released by the government. Corona virus lockdowns hampered the economy by disrupting demand and supply chains as also the production processes and output. Gross domestic product declined by 7%, compared with a 0.2% expansion in 2019, says a report released by Statistics South Africa.
The economy since 2011 has been growing though there were years when deceleration took place. This is the first annual contraction since 2009 when GDP fell 1.5%. The fall is triggered by decline in activities of various sectors including industry, commerce, restaurants and hotels. The fourth-quarter economy bucked the trend by growing stronger than economists expected. The GDP during this time grew by 1.5%.
During October and December, the industrial and commercial sectors grew. The health crisis and the restrictive measures have taken a heavy toll on Africa’s second-largest economy. Incidentally, at the end of March last year, the government imposed one of the strictest lockdowns in the world, to address the second wave pandemic. It has affected the economic outlook.
Most affected sectors included hospitality and tourism sectors, mainly due to night time curfews and ban on the sale of alcohol. With the easing of lockdown, economic activities picked up in the third quarter with the easing of restrictions in the third quarter. But a second wave triggered by a new variant of Covid-19 in December forced the authorities to reinstate certain measures, which the economy has apparently resisted. Economic analysts predict the economic situation will improve in 2021 with the country increasingly resorting to vaccination. .
