South African economy rebounds in third quarter

South African 100 rand banknotes against a black background in South Africa. Photographer: Waldo Swiegers/Bloomberg (South African 100 rand banknotes against a black background in South Africa. Photographer: Waldo Swiegers/Bloomberg, ASCII, 116 compon
South African 100 rand banknotes against a black background in South Africa. Photographer: Waldo Swiegers/Bloomberg/Getty Images

South Africa’s economy bounced back strongly in the third quarter from a slump inflicted by the coronavirus pandemic, official data showed Tuesday.

Gross domestic product (GDP) in Africa’s second-largest economy expanded 13.5 percent quarter-on-quarter in July-September, “largely as a result of the easing of COVID-19 lockdown restrictions,” statistics agency StatSA said in a statement.

The previous three months had brought a 16.6-percent contraction.

In annualized terms, the statistics agency’s preferred measure, third-quarter growth reached 66.1 percent, after falling back by 51.7 percent in April-June.

To this day, South Africa accounts for most African coronavirus cases, with almost 820,000 confirmed infections out of 2.3 million across the continent.

Leaders imposed a strict lockdown on March 27, aimed at controlling the virus’ spread but which also hobbled the economy.

The government started to gradually loosen restrictions as new infections slowed during the third quarter, allowing economic activity to start picking back up.

Manufacturing, trade and mining were “the biggest drivers of growth in the third quarter,” the statisticians said, contributing 16.2, 14.6 and 11.8 percentage points respectively to GDP growth.

“Despite the rebound, the economy is still 5.8 percent smaller than it was at the end of 2019,” StatSA added.

The UN forecasts that it will take around five years for South Africa’s economic activity to return to pre-pandemic levels.

The economy was already in recession — its second in two years — before it was hit by the virus, and had shrunk by 0.4 percent quarter-on-quarter during the first three months of 2020.