SA economy contracted by 7% in 2020

The country’s gross domestic product (GDP) grew at an annualised rate of 6.3% in the fourth quarter of 2020, while the size of the economy grew by 1.5 % on a non-annualised basis. Expenditure on real GDP increased at an annualised rate of 6.5% in the fourth quarter of 2020.

The annual real GDP growth rate of -7% in 2020 was mainly the result of a fall in manufacturing, which contributed -1.4 percentage points based on growth of -11.6%, trade, catering and accommodation, which contributed -1.3 percentage points based on growth of -9.1% and transport, storage and communication which contributed -1.3 percentage points based on growth of -14.8%.

The agriculture, forestry and fishing industry grew by 13.1% in 2020, while general government increased by 0.7% in 2020.

Expenditure on GDP also fell by 7.1% in 2020, after an increase of 0.1% in 2019. Household final consumption expenditure decreased by 5.4% and contributed -3.4 percentage points.

The main contributors to the fall of -5.4% in household spending were expenditure on transport (-10.6% and contributing -1.5 percentage points), clothing and footwear (-21% and contributing -1.2 percentage points), restaurants and hotels (-41.8% and contributing -1.1 percentage points) and alcoholic beverages, tobacco and narcotics (-16.9% and contributing -0.8 of a percentage point).

Gross fixed capital formation decreased by 17.5%, contributing -3.4 percentage points to total growth, and changes in inventories contributed -2.6 percentage points to total growth.

Net exports contributed 2.1 percentage points to growth in expenditure on GDP.

The economy saw a sharp rebound in the fourth quarter of 2020.

Expenditure on real GDP grew at an annualised rate of 6.5% in the fourth quarter of 2020. Household final consumption expenditure increased at a rate of 7.5% in the fourth quarter, with the highest growth rates in semi-durables and non-durables, while the largest contributors to growth were non-durables and services.

The main positive contributors to growth in household expenditure on restaurants and hotels (217.9% and contributing 1.8 percentage points), food and non-alcoholic beverages (6.6% and contributing 1.3 percentage points), recreation and culture (20.9% and contributing 1 percentage point), clothing and footwear (20.9% and contributing 0.9 of a percentage point), furnishings, household equipment and maintenance (10.3% and contributing 0.9 of a percentage point) and health (8.5% and contributing 0.6 of a percentage point).

Final consumption expenditure by general government increased at a rate of 1.1% in the fourth quarter. Increases in compensation of employees and spending on goods and services were reported in the fourth quarter.

Net exports contributed negatively to growth in expenditure on GDP in the fourth quarter, but exports of goods and services increased at a rate of 26.6%, largely due to increased trade in vehicles and other transport equipment, precious metals and stones and base metals and articles of base metals.

Imports of goods and services increased at a rate of 52.4%, largely due to increased imports of vehicles and transport equipment, base metals and articles of base metals and machinery and electrical equipment.

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