(5 minutes read)
· South Africa’s economy collapsed by 51% between April and June due to the backlash of the pandemic, dragging the business confidence further down
· According to the country’s statistics agency, an
unprecedented decline in GDP was anticipated since the national lockdown imposed on March 27 due to limited population movement and reduced business activities
· The two most affected segments are manufacturing and mining
South Africa’s economy collapsed by 51% between April and June due to the backlash of the pandemic, dragging the business confidence further down.
According to the country’s statistics agency, an unprecedented decline in GDP was anticipated since the national lockdown imposed on March 27 due to limited population movement and reduced business activities. The two most affected segments are manufacturing and mining.
While the economy had already declined by 2% mainly due to the shrinking activity of the mine and manufacturing industries, the limited movement of the population did the rest of the damage to the economy, which fell by 21.5% and 8.5% respectively during this period. However, agriculture, forestry and fishery sectors have bucked the trend. The growth in these sectors has increased by 15% between April and June, giving some relief to the economy.
The data released by the statistics agency did not disclose the level of unemployment for the second quarter. Experts feel that it might have significantly gone up as against the first quarter, when it touched over 30%.
President Cyril Ramaphosa in April announced a stimulus package of nearly US$30 billion including a wage protection program and a special social subsidy for the most financially challenged South Africans. Besides, in July, the country received a US$4.3 billion emergency loan from the International Monetary Fund. It is instructive to see how far these activities have impacted the economic and business rhythm of the country.
