South Africa’s economy shrunk by a record 51 percent in the second quarter of 2020, thanks to the recession and Covid-19 pandemic, Statistics South Africa (Stats SA) said on Tuesday.Describing this development as “a severe punch in the gut” of the economic belly, Stats SA said the negative growth was brought about by the country’s recession and the coronavirus pandemic that saw a complete shutdown of the economy from April to July.
“Perhaps the second quarter of 2020 will become known as the pandemic quarter.
“South Africa’s economy suffered a significant contraction during April, May and June when the country operated under widespread lockdown restrictions in response to Covid-19,” the agency said.
Stats SA said the country’s gross domestic product (GDP) fell by just over 16 percent between the first and second quarters of 2020, giving an annualised growth rate of minus 51 percent.
“This contraction dwarfs the annualised slowdown of 6.1 percent recorded in the first quarter of 2009 during the global financial crisis,” it said.
Historical data from 1960, sourced from the South African Reserve Bank, shows that the second quarter of 2020 experienced the biggest fall in GDP since that year, “far steeper than the annualised 8.2 percent decline in the fourth quarter of 1982.”
Stats SA said nearly all of the country’s industries experienced a massive drop in output in the second quarter of 2020, with the construction industry hit the hardest as it slumped by 76.6 percent.