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Isaah Mhlanga | 13 years of economic growth wiped out in one quarter

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Isaah Mhlanga, chief economist at Alexander Forbes.
Isaah Mhlanga, chief economist at Alexander Forbes.

GDP statistics were released yesterday and they showed an economy in deep recession.

Growth contracted by 51% q/q seasonally adjusted and annualised (Saar), much worse than the Bloomberg consensus expectations for a contraction of 47.2%. The South African Reserve Bank had expected 40% q/q Saar contraction. The unannualised contraction is 16.4% q/q, while we compare it  with the second quarter of 2019 (the y/y figure), the economy contracted by 17.2%.

All sectors except agriculture, most of whose subsectors were declared essential services and thus were not closed, recorded deep contractions. The contraction is therefore broad-based and was to be expected.   

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