South Africa’s third-quarter GDP (measured by production) contracted by 1.5% following a 1.2% expansion in the second quarter and 1.0% growth in the first quarter of 2021, underlining the damage the riots in July had on the economy.
The country’s two largest provinces by contribution to gross domestic product – KwaZulu-Natal and Gauteng – were gutted when deadly riots broke out after the incarceration of former president Jacob Zuma. Zuma is currently out on medical parole.
The rand gave up 10c immediately after the release to trade at R15.97 against the US dollar. “The currency has been on the back foot during the course of this morning and could remain under pressure after the release,” comments TreasuryONE.
The unit opened trading this morning at R15.86/$ and reached an intraday low of R15.84 before the GDP print.
Last month StatsSA reported the number of people employed in Gauteng and KwaZulu-Natal fell by 323,502 to 6.7 million, pushing the country’s jobless rate to a record 34.9%.
The biggest decline in jobs in those provinces were in the trade sector, the industry most affected by the unrest that according to the South African Property Owners Association cost the country about R50bn, reports Bloomberg.
Today, StatsSA reported that the trade, catering and accommodation industry decreased by 5.5%, contributing -0.7 of a percentage point to GDP growth. Decreased economic activities were also reported for wholesale, retail and motor trade; and catering and accommodation services.
The manufacturing industry decreased by 4.2% in the third quarter, contributing -0.5 of a percentage point to GDP growth.
Eight of the ten manufacturing divisions reported negative growth rates in the third quarter. The motor vehicles, parts and accessories and other transport equipment division made the largest contribution to the decrease in the third quarter. The food and beverages division and basic iron and steel, non-ferrous metal products, metal products and machinery division also made noteworthy contributions to the contraction, according to StatsSA.
Unadjusted real GDP at market prices for the first nine months of 2021 increased by 5.8% compared with the first nine months of 2020.
