GDP collapses 51% in the second quarter – Moneyweb

GDP collapses 51% in the second quarter – Moneyweb

South Africa’s Gross Domestic Product (GDP) for the second quarter of 2020 shrank by a mammoth 51%, mainly as a result of the Covid-19 lockdown coming into effect during that period, a report by Stats SA shows.

Source: Stats SA

The quarter-on-quarter seasonally-adjusted annualised GDP is adjusted for inflation and seasonal changes, was expected to show a sharp decline on that for the first quarter, as a result of the five-week long lockdown bring a halt to most economic activity.

The 51% drop was not far off from the 50% fall predicted by Efficient Group chief economist Dawie Roodt on the MoneyWebNow podcast, on Tuesday morning.

Roodt did expect the lifting of some the lockdown restrictions to lead to a recovery in the third quarter, but expected GDP for the year to be down about 10% for the year.

The drop off in growth was across the board, with no sectors showing any rises.

Source: Stats SA

“The manufacturing industry contracted by 74,9% in the second quarter. All ten manufacturing divisions reported negative growth rates in the second quarter. The divisions that made the largest contributions to the decrease were basic iron and steel, non-ferrous metal products, metal products and machinery; food and beverages; and petroleum, chemical products, rubber and plastic products,” Stats SA reported.

 

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