Despite Q2 growth, overall economic activity still a concern for economists
Statistics South Africa released the second quarter GDP data on Tuesday. It indicated that the economy was nowhere near the unsatisfactory pre-COVID figures, while economic activity was back to 2017 levels.
JOHANNESBURG - Civil society organisations and economists are reluctant to read too much into the 1.2% economic growth during the second quarter of the year, saying that overall economic activity levels were still a concern.
Statistics South Africa released the second quarter GDP data on Tuesday.
It indicated that the economy was nowhere near the unsatisfactory pre-COVID figures, while economic activity was back to 2017 levels.
PPS Investment Portfolio manager Reza Hendrickse said that the third COVID-19 wave, which gathered momentum in June, appeared not to have had any serious impact on the second quarter growth, which beat expectations.
Some economists had projected that the economy would see a paltry 0.7% for the period under review.
Statistician-General Risenga Maluleke explained how the economy was still impacted by the pandemic.
“The last quarter, which was the highest, was the first quarter of 2020 when we were sitting at R1.147 trillion. So, when we dropped in the second quarter of 2020, we were sitting at about R947 billion. So we are still a bit lower than where we were before pre-COVID.”
Meanwhile, trade union federation Cosatu said that the 1.2% expansion was deceptive as it reflected the effects of the reopening and partial stabilisation of the economy after a period of extreme lockdown.
The Steel and Engineering Industries Federation of Southern Africa has described the data as encouraging, more so for mining and agriculture, which showed positive growth.