President Cyril Ramaphosa says that South Africa’s 13.5% rebound in GDP during the third quarter of 2020 shows that a strong recovery is possible, even as the economy remains below its pre-pandemic levels.
However, he warned that a second coronavirus wave in the country could derail recovery efforts.
Commenting on the data released by Stats SA on Tuesday (8 December), the president said that GDP growth in the third quarter surpassed even the most optimistic market expectations.
This coincided with a surprisingly swift increase in economic activity as most restrictions designed to contain the spread of Covid-19 were lifted, he said.
Gross fixed capital formation also increased at a rate of 26.5%. While GDP contracted 6% year-on-year, the strong increase from the second quarter suggests that the economy is recovering more quickly than expected.
“In recent months, encouraging green shoots have emerged which provide a foundation for economic reconstruction and recovery.
“The mining and agriculture sectors in particular have demonstrated robust growth in the context of favourable market conditions. As a result of large trade surpluses, a record current account surplus is anticipated.”
The president said that a strong recovery in economic activity was made possible by the country’s success in bringing the virus under control.
“The strong rebound in GDP growth for the third quarter provides support for the approach that we have taken both to confront the pandemic and to protect the economy.
“Our task now is to ensure that this momentum is sustained, to enable a full recovery of the economy.
“A resurgence of the virus is now the single most serious threat to the economic recovery that is underway. As we move into celebrating the festive season and spending time with our families, we must remain vigilant to prevent a second wave.”
The president called on all South Africans to wear a mask, keep a safe distance from others, avoid crowded or poorly ventilated spaces and wash hands regularly.
“These simple measures are necessary not only to protect ourselves and others, but to support the continued recovery of the economy,” he said.