South Africa’s GDP drops 51% in Q2 as pandemic bleeds country's economy
New Delhi | Jagran News Desk: South Africa's gross domestic product plummeted by an unprecedented 51% in the second quarter of the year, recording one of the steepest contractions by any major economy during the coronavirus pandemic. The government imposed a strict lockdown across the country in March as it scrambled to rein in the spread of coronavirus, pushing the economy into deep recession.
"South Africa’s economy contracted by 51%" in the second quarter of 2020 compared with the same period last year, Statistics South Africa said in a statement, adding: "The punch in the gut was severe," news agency AFP reported.
The predicted drop in GDP was driven largely by steep declines in the construction, manufacturing and mining sectors, where activity shrank by up to 70 percent. The Manufacturing sector was the worst affected as it witnessed a contraction of 74.9% in the second quarter. All ten manufacturing divisions reported negative growth rates in the second quarter.
Borders were shut and even domestic travel was curtailed during the three months while restaurants closed and the sale of alcohol was prohibited.
"Spending on restaurants and hotels ground to an almost complete halt, plunging by 99.9%," StatsSA said.
In June, Finance Minister Tito Mboweni projected that the economy would shrink by 7.2 percent in 2020 as a result of the coronavirus pandemic, the deepest slump in 90 years.
The anti-virus restrictions also severely affected the tourism industry, one of South Africa's leading contributors to GDP. Notably, it was the fourth consecutive decline in quarterly GDP since the second quarter of 2019.
As of Monday night, South Africa had recorded 639,362 coronavirus cases—the seventh-highest caseload globally—and 15,004 deaths.
(with AFP inputs)
Posted By: Rakesh Kumar Jha