South Africa’s Economy Shrinks By 51% in Q2

Data published on Tuesday show South Africa’s economy has shrunk by 51% in the second quarter of 2020, .

Statistician-General Risenga Maluleke told a news conference that the contraction is South Africa’s fourth quarterly contraction in a row and largest on record.

South Africa had imposed one of the harshest lockdown restrictions in the world to curtail the spread of coronavirus. The lockdown shut down most economic activies.

Before Tuesday’s data, analysts had predicted a 47.3% contraction. The rand fell roughly 1% against the dollar to trade at 16.9325 per dollar.

Joe de Beer, another top official at Statistics South Africa, said that after adjusting for inflation the economy was roughly the same size in the April-June quarter as in the first quarter of 2007.

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Except for agriculture, all sectors of the economy saw big declines, with industries such as aviation, tourism and hospitality coming to a virtual standstill.

The controversial ban on alcohol and cigarettes saw consumer spending on these items fall by a massive 92%.

Mining declined 73.1%, manufacturing 74.9% and construction 76.6%. Gross domestic product (GDP) for the whole economy shrank 17.1% from the same period in 2019.

The government expects a GDP decline of at least 7% in 2020, a worrying prediction in a country where unemployment was at about 30% before COVID-19.

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