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GDP collapses 51% in the second quarter

The quarter-on-quarter fall is the fourth consecutive decline in quarterly GDP since the second quarter of 2019.
Lockdown weighs on the economy. REUTERS/Siphiwe Sibeko

South Africa’s Gross Domestic Product (GDP) for the second quarter of 2020 shrank by a mammoth 51%, mainly as a result of the Covid-19 lockdown coming into effect during that period, a report by Stats SA shows.

Source: Stats SA

The quarter-on-quarter seasonally-adjusted annualised GDP is adjusted for inflation and seasonal changes, was expected to show a sharp decline on that for the first quarter, as a result of the five-week long lockdown bring a halt to most economic activity.

The 51% drop was not far off from the 50% fall predicted by Efficient Group chief economist Dawie Roodt on the MoneyWebNow podcast, on Tuesday morning.

Roodt did expect the lifting of some the lockdown restrictions to lead to a recovery in the third quarter, but expected GDP for the year to be down about 10% for the year.

Rand Reacts

The drop off in growth was across the board, with no sectors showing any rises.

Source: Stats SA

“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,” Stats SA reported.

All the industrial sectors declined and only the agriculture, forestry and fishing industry showed positive growth.

  • The manufacturing industry contracted by 74.9%
  • The trade, catering and accommodation industry decreased by 67.6%
  • The transport, storage and communication industry decreased by 67.9%
  • The mining and quarrying industry decreased by 73.1%
  • The finance, real estate and business services industry decreased by 28.9%
  • The agriculture, forestry and fishing industry increased by 15.1%

Households felt the brunt of the lockdown with household final consumption expenditure dropping 49.8% and contributing -30,8 percentage points to total growth.

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Something is not quite adding up with STATS SA for the first quarter…

“The South African economy recorded its third consecutive quarter of economic decline, falling by 2,0% (seasonally adjusted and annualised) in the first quarter of 2020.1 This followed a contraction of -1,4% and -0,8% in the fourth and third quarters of 2019, respectively.”

Therefore maybe the 2020 year drop may end up to be -30%, not the 7.2% drop the IMF and OECD stated.

I cannot wait for EWC.

Even better,NHI. The government couldn’t run a lab during the pandemic.

But fortunately my hair is looking really good today…

This is a calamity! But worse is that the year will be down by more than 10%. expect unemployment and debt defaults to rocket!

Whahahaaaaajhahahaaaa!!!

Self inflicted by the #VoetsekANC. How thick can you be???????

15, 000 dead from COVID. Yet, 14, 000 die per annum on our roads, 19, 000 murdered in SA per annum! So they literally destroyed an economy that was already teetering on the brink. Death and carnage on our roads, in our suburbs and our businesses, with violence and sexual assault common place. Cops and army nowhere. NOTHING is done about that, yet I get criminalised for walking my dog, or buying a pack of cigarettes. Cops and army everywhere. Mark my words, the poorest of the poor will soon start dying of starvation and it will be in the hundreds of thousands. Forget the IMF, soon it’ll be the white planes of the UN bringing in food.

The most successful attempt yet by the government to make everyone equal.

And the voters thought the ANC wanted to make everyone equally rich…

Minus 51% Q2 GDP!

Is the SARB and Treasury still going to stick to their expected full year minus 6.4% – 8.0%?

Most of the Moneyweb community could have predicted this. Where were the economic experts warning of this, when we were listening to the medical experts telling us lockdown is the only solution.

Devastating – does not come close to describing what this has done and WILL DO to RSA. The public will be begging government to use pensions and enshrine prescribed assets further into law, very soon just to ease some of the coming pain.

Maybe this was the goal of lockdown all along. What better way to kick off radical economic transformation, than having the public beg for it.

The y on y drop will be no less than 20%

PROUDLY brought to you by the ANC….

The irony is, that they are really proud of it.
They are high-fiving each other for saving “countless number of lives”

No surprise that the Gov’t figure seems to be completely unaffected by the lockdown. It’s pretty much exactly were we’d expect it to have been regardless.

Wish we could all have free lunch too!

and now for our national health program

When did the ANC say they’re introducing the National Health Plan?

Can’t wait to see how they work the figures on this one after the “Council” collapsed the economy during Covid!

Look at the bright side….

There is still 49% left….

LOL…..

According to StatsSa the economy contracted by 16% from Q1 to Q2.
Sure, if we assume that that the economy keeps contracting by 16% per quarter over the next three quarters (as economists like to measure and report these things), it will have contracted by 51% over the year. But that assumes there is some kind of trend or momentum, which is not the case here. These headlines are just being sensational. Surely a 16% decline is bad enough.

The ANC incompetence and looting caused the potential of the economy to collapse by 80% over the last 26 years, and then lockdown measures caused a further 50% collapse from there.

“The real cost of the State is the prosperity we do not see, the jobs that don’t exist, the technologies to which we do not have access, the businesses that do not come into existence, and the bright future that is stolen from us.” Frédéric Bastiat

So will the bloated Public Service still receive a 5%+ increase in their salaries?

How dare you suggest that they only get a 5% increase? I mean these comrades are at the heart of our wonderful life here in paradise. I mean who else is going to sit around in groups and ignore you at municipal offices? And who is going to tell you after 30 minutes of waiting that the system is “offline”? Who is going to draft the new “road map” to recovery if they do not get the big increase? I mean the “fees” from state coffers are drying up, so how are they going to sustain their mediocre lifestyles without the increase? Aston Martins do not buy themselves you know.

Well, what DID Pres CR think would happen when one “lock down” almost the entire economy??

(….maybe he is “shocked” by the result…)

And please DO NOT tell us this economic decline (as result of C19) was “unintentional”. The ANC very well KNEW what they let themselves into.

But don’t worry, you’ll always hear news media reports in future years (despite the econ decline) that Rbillions was mismanaged/misappropriated/wasted in corruption on this or that.

And dominating the headlines and national debate in SA today is…hairproduct

That SA have not completely collapsed is incredible

And the purge continues…………

Well, when you have “special people” that makes decisions in matter above their understanding of the bigger picture….you get a disaster.
It goes to show that the current government t has no vision…:but blame it on the past….easy way out

When you are still and silent and reflect : Can you hear the fat lady sing ? I can.

In 2018, 5000 people died from TB in South Africa PER MONTH. Not a lockdown in sight. For some reason (part of which is becoming more apparent), not a single person is allowed to die from “COVID-19”. If the government has to starve the population and crash an economy already on the brink, so be it!

The absolute insanity of this “COVID-19” hoax and the response of governments globally is simply mind-boggling.

End of comments.

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