SA economy shrinks by 1.5% in the third quarter

7th December 2021 By: News24Wire

SA economy shrinks by 1.5% in the third quarter

Photo by: Reuters

South Africa's gross domestic product (GDP) contracted by 1.5% in the third quarter of the year on a quarter-on-quarter seasonally adjudged basis, according to Stats SA. 

The largest falls were in trade, manufacturing and agriculture. 

The decline brings to an end a period of tentative growth following a record GDP plunge in September last year. The economy grew by 1% in the first quarter and a revised 1.1% in the second quarter of 2021.

On a year-on-year unadjusted basis, GDP grew by 2.9%.

Market watchers had widely predicted a fall in GDP following four successive quarters of growth.  

"The looting and unrest in parts of the country in July, coupled with tighter lockdown restrictions, weighed on activity during the early part of the third quarter," said Lara Hodes, an economist at Investec, who predicted a contraction of 1%.  

She noted that household spending continued to be constrained by heightened unemployment and rising food and fuel prices.

Economic activity 

Stats SA said SA's economic activity is still only near the level it was in the first quarter of 2016, underscoring the economic damage caused by the Covid-19 pandemic and recent recessions.