South Africa’s economy grew for the fourth consecutive quarter, expanding 1.2% in the second quarter of 2021.
Stats SA noted in its GDP release that there was increased production reported for platinum group metals, which have experienced a massive uptick in demand amid the commodity cycle.
But the economy is still 1.4% smaller than it was, before the Covid-19 pandemic — which caused it to contract 6.4% last year — and an expansion of 1.2% is not enough to drive sustained growth and employment, analysts say.
According to GDP data released by Statistics South Africa on Tuesday, economic growth was driven mainly by gains in the transport, storage and communication industry, which increased 6.9% in the second quarter.
Other gains were made in the agriculture, forestry and fishing industry (6.2%) and the personal services industry (2.5%); the trade, catering and accommodation industry increased 2.2% and mining was up 1.9%.
However, there were declines in construction — which decreased 1.4% in the second quarter — as well as manufacturing and finance sector activity.
The manufacturing industry decreased 0.8% in the second quarter, deducting 0.1 of a percentage point from GDP growth. Six of the 10 manufacturing divisions reported negative growth rates in the second quarter, according to Stats SA.
Finance, real estate and business services decreased 0.4% in the second quarter.
Citibank economist Gina Schoeman said that, at a glance, the second-quarter GDP increase was not robust enough to support long-term economic growth and drive employment.
According to the most recent figures, South Africa’s unemployment rate stands at a whopping 34.4% as of the second quarter. This is the highest jobless rate on a global list of 82 countries monitored by Bloomberg.
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