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(Getty)
- New data from Statistics SA shows that domestic GDP contracted 7% last year.
- This is one of the worst contractions in the world, but given that South Africa had one of the strictest locks, it is not as bad as feared.
- Also, the fourth quarter looked stronger than expected.
- For more articles, go to www.BusinessInsider.co.za.
South Africa’s GDP fell 7% last year when the pandemic paralyzed the economy for months.
This is one of the worst recessions in the world, but better than many expected, including the IMF, which forecast a contraction of 7.5%, given that South Africa had one of the tightest lockdowns in the world.
Additionally, stronger-than-expected growth in the fourth quarter offered some hope. The economy was 1.5% larger in the fourth quarter than in the third. GDP in the fourth quarter was “only” 4.1% lower than in the same quarter of 2019, while in the third quarter it was still more than 6% lower than the previous year.
Still, economists believe it may take several years for the economy to recover to pre-pandemic levels.
You will probably not be alone, as many other countries struggle to shoot full blast.
Here’s how South Africa’s GDP drop (-7%) and Covid’s official death rate (50,803, or if excess deaths are included, closer to 128,000) compared to other countries:
United Kingdom: -9.9% – 125,000 deaths from Covid
Philippines: -9.5% – 13,000 dead
Italy: -8.9% – 100,000 dead
France: -8.3% – 88,600 dead
India: -8% (estimate) – 158,000 dead
Malaysia: -5.6% – 1,200 dead
Canada: -5.4% – 22,200 deaths
Singapore: -5.4% – 29 dead
Germany: -5% – 72,500 dead
Japan: -4.8% – 8,250 dead
Brazil: -4.1% – 266,000 dead
United States: -3.5% – 538,000 dead
Russia: -3.1% – 89,500 dead
Turkey: + 1.8% – 29,000 dead
China: + 2.3% – 4,600 dead
While most countries, such as South Africa, have seen a continued recovery in the fourth quarter of 2020, this was not the case everywhere. In the euro area, GDP contracted 0.7% in the last quarter due to renewed blockades slowing down activity.
But unlike most countries, South Africa’s economy was in recession before Covid.
“So the pandemic has simply exacerbated the structural weakness already present,” says Casey Delport, investment analyst at Anchor Capital.
“While the latest Covid-19 restrictions have eased since then, the risk of a resurgence of infections and the re-imposition of tighter restrictions persists, especially as South Africa continues to lag behind the richest developed nations in launching its immunization campaign, “Delport said.
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