South Africa’s economy records its first annual contraction in 11 years

Pretoria, March 9 (AFP/APP): South Africa’s economy recorded its first annual contraction in 11 years in 2020 due to the pandemic but it extended its rebound in the last quarter, official data showed Tuesday.

The country’s gross domestic product shrank by 7.0 percent in 2020 compared to a 0.2 percent expansion a year earlier, statistics agency StatSA said in a statement. The drop was “primarily led by decreases in manufacturing, trade, catering and accommodation,” it said. It was the first annual contraction since 2009, when GDP fell by 1.5 percent.

But the economy — already in recession when it was hit by the virus — showed signs of resilience despite Covid-19 restrictions and grew by 1.5 percent in the final quarter of 2020, with annualised growth of 6.3 percent. The GDP growth between October and December was driven mainly by a boom in the manufacturing and trade sectors, said StatSA.

It is an extension of a recovery that started in the third quarter — when it posted a 13.5 percent quarter-on-quarter growth — after the pandemic handed Africa’s second-largest economy a record slump. In annualised terms, the statistics agency’s preferred measure, third-quarter growth reached 66.1 percent, after falling back by 51.7 percent between April and June.

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