Economy Suffers in SA as Contraction Reported at 51%

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By Seth Meyer

This article is exclusive to the Online Edition 10 of VARSITY News.

 

The second quarter report of the Republic of South Africa’s fiscal year has given a dire and disheartening number that many South Africans had come to expect under the harsh impact of the Covid-19 pandemic on the nation and the world at large. Statistics South Africa outline the various sectors of the economy that have suffered, with a total reported contraction of 51%. To briefly summarise, from a report in the Wall Street Journal:

  • In comparison to last year’s second quarter report, South Africa’s Gross Domestic Product has fallen by 17.6%
  • Manufacturing contracted by 74.9%
  • Trade, catering and accommodation shrank by 67.6%
  • Mining sector output decreased by 73.1%

 

The country already struggled with a weal economy before the pandemic and subsequent lockdown. The recent crisis of Covid-19 had only served to exacerbate deterioration. The country’s debt is forecast to reach 81.8% of the national GDP at the end of the fiscal year.

 

The rate of infection and case numbers in the country have been steadily declining. The President has now mandated a move to Level 1 in the country’s 5 level lockdown strategy, hoping to ease stress on and kick start the economy back towards a normal level. Yet, as economist Duma Gqubule reported to the Wall Street Journal, the combination of Covid-19 and an already ailing economy has become “the worst crisis this country has ever faced”

 

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