South Africa’s recovery momentum faltered in Q3 amid civil unrest and the third wave of Covid-19 infections

SOUTH AFRICA - Report 07 Dec 2021 by Iraj Abedian

As we had expected and predicted in previous reports, the South African economy contracted during the third quarter of 2021, with real annualized quarterly GDP declining by 1.5%. This was following four consecutive quarters of positive growth since Q3 2020, with growth rates of 0.9% q/q and 1.1% q/q recorded in the first and second quarter of 2021, respectively.

Today’s disappointing GDP print came on the back of tighter economic restrictions (meant to curb the spread of Covid-19 during the country’s third wave of infections), especially at the beginning of Q3, as well as the July civil unrest that resulted in the destruction of property and infrastructure. What’s more, the unrest particularly targeted the economic infrastructure in the country’s two provincial economic powerhouses, Gauteng and KwaZulu Natal, which magnified their adverse impact on the economy.

Notwithstanding the hiccup in economic recovery during Q3 2021, all in all, (unadjusted) GDP growth for the first three quarters of the current year is still 5.8% higher than the corresponding period in 2020.

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