- The just-released data by Statistics South Africa showed a deeper contraction of the South African economy in the third quarter of 2021.
- The decline of the estimated 1.5% is attributed to the prolonged Covid-19 lockdown restrictions and the spate of riots in July.
- The July unrest highlighted the risk of social unrest to South Africa’s investment and economic outlook.
The just-released data by Statistics South Africa showed a deeper contraction of the South African economy in the third quarter of 2021. The decline of the estimated 1.5% is attributed to the prolonged Covid-19 lockdown restrictions and the spate of riots in July. The July unrest highlighted the risk of social unrest to South Africa’s investment and economic outlook.
The statistics show that the earlier estimates of gross domestic product (GDP) growth for the full year have to be revised. The figures underline the impact of the July riots, combined with the third wave hit manufacturing activity and employment. The manufacturing sector dropped by 4.2% in Q3, leading to a record 34.9% unemployment rate during the quarter. The manufacturing activity was hit by strikes in October while the power crisis continued to harm energy-intensive sectors. Trade and agriculture also declined in the three months to the end of September, though the finance sector managed growth of 0.3% in the quarter.
The outlook for the fourth quarter is also not encouraging according to Christie Viljoen, economist and senior manager at PwC. He noted, that among other setbacks, the travel bans slapped on South Africa since the emergence of the Omicron variant is an additional blow. Economic activity was struggling to revive even before the emergence of a fourth virus wave driven by the Omicron variant.
