South Africa’s economy is now the same size it was almost five years ago

 ·8 Mar 2022

South Africa’s gross domestic product (GDP) increased by 4.9% in 2021, rising significantly from a low base following the Covid pandemic and associated lockdowns restrictions which saw the economy contract by 6.4% in 2020.

Mining, agriculture and manufacturing recorded the highest growth rates in 2021, with finance, personal services and manufacturing the largest positive contributors to overall growth, Statistics South Africa said in a release on Tuesday (8 March).

By comparison, the construction industry contracted in 2021, falling by 1.9%. This was the fifth consecutive year of decline in the sector.

After recording four consecutive quarters of positive growth, real gross domestic product (GDP) slumped by 1.5% in Q3 2021 off the back of lockdown restrictions, the July riots and load shedding – eroding some of the economic gains the country has made since the severe impact of Covid-19 in the second quarter of 2020.

However, Q4 was upbeat and reported a 1.2% increase, with personal services, trade, manufacturing and agriculture the key drivers of growth.

An increase in demand for goods and services drove up the expenditure side of the economy, with exports and household expenditure the most significant contributors to growth, StatsSA said.

“Despite these positive figures, real GDP has yet to recover to the level recorded in the second quarter of 2021, before civil unrest and stricter lockdown restrictions shook the economy in the third quarter.

“Real GDP continues to lag pre-pandemic levels too, with economic activity on par with the third quarter of 2017. The economy is 1.8% smaller than it was in the first quarter of 2020,” the statistics body said.

 


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