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South Africa Recession Enters Q4 With 51% Drop In GDP - Business - Nairaland

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South Africa Recession Enters Q4 With 51% Drop In GDP by rodeo0070(m): 1:18pm On Sep 08, 2020
South Africa’s gross domestic product (GDP) decreased by 51.0% in the second quarter of 2020 owing to the impact of the COVID-19 lockdown restrictions since the end of March 2020. Notably, this was the fourth consecutive decline in quarterly GDP since the second quarter of 2019.

South Africa’s restrictions to curb the spread of the coronavirus put the economy into its longest recession in 28 years, with gross domestic product contracting more than expected in the second quarter.

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.

The trade, catering and accommodation industry decreased by 67,6%. Decreased economic activity was reported in wholesale trade, retail trade, motor trade, catering and accommodation. The industry was hit hard as only selected essential goods were allowed to be sold during the early stages of the lockdown. In addition, catering and accommodation establishments were severely restricted during the lockdown.

The transport, storage and communication industry decreased by 67,9%. Decreases were reported for land transport, air transport and transport support services.

The mining and quarrying industry decreased by 73,1% and contributed -6,0 percentage points to GDP growth. Owing to global lockdown restrictions, demand for mineral products fell, contributing to decreased production in platinum group metals (PGMs), gold, iron ore, chromium ore and coal.

The finance, real estate and business services industry decreased by 28,9% and contributed -5,4 of a percentage point to GDP growth. Decreases were reported for financial intermediation, insurance and pension funding, auxiliary activities and other business services.

The agriculture, forestry and fishing industry was the only positive contributor to GDP growth, with an increase of 15,1% and a contribution of 0,3 of a percentage point to GDP growth. The increase was mainly due to increased production of field crops and horticultural and animal products.

The unadjusted real GDP at market prices for the first six months of 2020 decreased by 8,7% compared with the first six months of 2019.

Expenditure on GDP

Expenditure on real gross domestic product fell by 52.3% in the second quarter of 2020.

Household final consumption expenditure decreased by 49,8% in the second quarter, contributing -30.8 percentage points to total growth.

The largest decreases were reported for expenditures on semi-durable and durable goods as the sale of these goods was largely restricted during the lockdown.

The main negative contributors to growth in HFCE were expenditures on transport (-71,4% and contributing -11,7 percentage points), clothing and footwear (-91,5% and contributing -8,0 percentage points), alcoholic beverages, tobacco and narcotics (-92,4% and contributing -6,9 percentage points), recreation and culture (-86,0% and contributing -6,6 percentage points), restaurants and hotels (-99,9% and contributing -6,5 percentage points), furnishings, household equipment and maintenance (-58,2% and contributing -5,3 percentage points) and food and non-alcoholic beverages (-26,8% and contributing -4,5 percentage points).

Expenditure on utilities, communication and education contributed positively to growth in HFCE as many households started working from home, consequently increasing their usage of utilities and communication services.

Final consumption expenditure by general government decreased by 0,9%. Decreases in employment and spending on goods and services were reported in the second quarter. Notwithstanding increased spending for the purchase of personal protective equipment on account of COVID-19, total spending on goods and services declined.

Gross fixed capital formation decreased by 59,9%. The main contributors to the decrease were construction works, machinery and other equipment, residential buildings, transport equipment and nonresidential buildings. Weak imports of machinery and other equipment, as well as transport equipment, contributed to the decrease in gross fixed capital formation.

Other assets contributed positively to growth in GFCF, owing to increased expenditure on computer software.

There was a R74,0 billion drawdown of inventories in the second quarter of 2020. The decreases in mining and manufacturing production contributed to the inventory drawdowns experienced in the second quarter of 2020. Drawdowns were also reported for the trades.

Net exports contributed negatively to the growth in expenditure on GDP in the second quarter. Exports of goods and services were down 72,9%, largely influenced by decreased trade-in vehicles and other transport equipment, precious metals and stones, base metals, machinery and equipment, and services.

Imports of goods and services decreased by 54,2%, driven largely by decreases in imports of vehicles and other transport equipment, machinery and electrical equipment, mineral products, base metals, and services.

SOURCE: https://brandspurng.com/2020/09/08/south-africa-recession-enters-q4-with-51-drop-in-gdp/

Re: South Africa Recession Enters Q4 With 51% Drop In GDP by Nobody: 1:31pm On Sep 08, 2020
They'll bounce back... It's a global issue.
Re: South Africa Recession Enters Q4 With 51% Drop In GDP by budaatum: 1:43pm On Sep 08, 2020
loneprof:
They'll bounce back... It's a global issue.
I wonder why we don't accept the drop in Naira's value and the increase in fuel price as a global issue. Perhaps its because it will not bounce back.

I doubt SA will bounce back until they solve their corruption and crime problems. I bet the people are not happy and will soon show it.

Re: South Africa Recession Enters Q4 With 51% Drop In GDP by Nobody: 1:57pm On Sep 08, 2020
budaatum:

I wonder why we don't accept the drop in Naira's value and the increase in fuel price as a global issue. Perhaps its because it will not bounce back.

I doubt SA will bounce back until they solve their corruption and crime problems. I bet the people are not happy and will soon show it.

Well, it's not a bad thing that you're comparing SA to Nigeria, but remember their corruption just began after Mandela's exit but we have been fighting the issue of corruption since 1960. We don't even have the infrastructures they have, otherwise our GDP would be sky high.

Either ways, whether they'll bounce back or not isn't mine to determine, it's left to their economic team. I wish them well as a fellow African country.
Re: South Africa Recession Enters Q4 With 51% Drop In GDP by budaatum: 2:09pm On Sep 08, 2020
loneprof:


Well, it's not a bad thing that you're comparing SA to Nigeria, but remember their corruption just began after Mandela's exit but we have been fighting the issue of corruption since 1960. We don't even have the infrastructures they have, otherwise our GDP would be sky high.

Either ways, whether they'll bounce back or not isn't mine to determine, it's left to their economic team. I wish them well as a fellow African country.
South Africa was corrupt under apartheid which began way back in 1948! Apartheid is precisely corruption, unless you don't see it as corruption of the rightful way things ought to be, of course. And you can't have infrastructure that you don't build.
Re: South Africa Recession Enters Q4 With 51% Drop In GDP by Nobody: 2:46pm On Sep 08, 2020
budaatum:

South Africa was corrupt under apartheid which began way back in 1948! Apartheid is precisely corruption, unless you don't see it as corruption of the rightful way things ought to be, of course. And you can't have infrastructure that you don't build.

It's unnecessary to mention apartheid cos that was clearly a government controlled and run by colonialists. You seem to have a poor sense of comparison. It's just like judging Nigeria pre-1960, it wouldn't make any sense...
Re: South Africa Recession Enters Q4 With 51% Drop In GDP by budaatum: 1:21am On Sep 09, 2020
loneprof:


It's unnecessary to mention apartheid cos that was clearly a government controlled and run by colonialists. You seem to have a poor sense of comparison. It's just like judging Nigeria pre-1960, it wouldn't make any sense...
To say corruption began in SA under Mandela is like cutting off all of SA's history before Mandela, which is why corrupt pre-Mandela comes into the equation. If you said corruption began in Nigeria in 1960, I would equally point you to corruption that predates 1960 whoever was ruling Nigeria.

And by the way, those you call colonialists are actually South Africans, and are mostly still South Africans.
Re: South Africa Recession Enters Q4 With 51% Drop In GDP by Nobody: 2:02am On Sep 09, 2020
budaatum:

To say corruption began in SA under Mandela is like cutting off all of SA's history before Mandela, which is why corrupt pre-Mandela comes into the equation. If you said corruption began in Nigeria in 1960, I would equally point you to corruption that predates 1960 whoever was ruling Nigeria.

And by the way, those you call colonialists are actually South Africans, and are mostly still South Africans.

Bros, please rest with your poor analysis, it makes no sense cos you're just trying to squeeze your opinion across no matter what...
And I clearly mentioned that the present corruption in SA started AFTER Mandela's presidency.

You really don't have a point!
Re: South Africa Recession Enters Q4 With 51% Drop In GDP by budaatum: 11:21am On Sep 09, 2020
loneprof:


Bros, please rest with your poor analysis, it makes no sense cos you're just trying to squeeze your opinion across no matter what...
And I clearly mentioned that the present corruption in SA started AFTER Mandela's presidency.

You really don't have a point!
You have the temerity to write "the present corruption", and you accuse me of squeezing an analysis? You funny, but at least you recognise a corruption that precedes the "present corruption" and which existed before Mandela's presidency.

You, have a point with your rich analysis. Lol.
Re: South Africa Recession Enters Q4 With 51% Drop In GDP by Nobody: 12:02pm On Sep 09, 2020
budaatum:

You have the temerity to write "the present corruption", and you accuse me of squeezing an analysis? You funny, but at least you recognise a corruption that precedes the "present corruption" and which existed before Mandela's presidency.

You, have a point with your rich analysis. Lol.

Bye man.

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