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President Cyril Ramaphosa says that the 13.5% rebound in South Africa’s GDP during the third quarter of 2020 shows that a strong recovery is possible, even as the economy remains below its pre-pandemic levels.
However, he warned that a second wave of coronavirus in the country could derail recovery efforts.
Commenting on the data released by Stats SA on Tuesday (December 8), the president said that GDP growth in the third quarter exceeded even the most optimistic market expectations.
This coincided with a surprisingly rapid increase in economic activity as most of the restrictions designed to contain the spread of Covid-19 were lifted, he said.
Gross fixed capital formation also increased at a rate of 26.5%. While GDP contracted 6% year-on-year, the strong increase in the second quarter suggests that the economy is recovering faster than expected.
“Encouraging green shoots have emerged in recent months, laying the foundation for economic reconstruction and recovery.
“The mining and agriculture sectors in particular have shown strong growth in the context of favorable market conditions. As a result of large trade surpluses, a record current account surplus is anticipated. “
The president said the strong recovery in economic activity was made possible by the country’s success in controlling the virus.
“The strong rebound in GDP growth for the third quarter supports the approach we have taken both to face the pandemic and to protect the economy.
“Our task now is to ensure that this momentum is maintained, to allow a full recovery of the economy.
“The resurgence of the virus is now the most serious threat to the economic recovery that is underway. As we get closer to celebrating the holiday season and spending time with our families, we must remain vigilant to avoid a second wave. “
The president called on all South Africans to wear a mask, keep a safe distance from others, avoid crowded or poorly ventilated spaces, and wash their hands regularly.
“These simple measures are necessary not only to protect ourselves and others, but to support the continued recovery of the economy,” he said.
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