South Africa's Economy Has Emerges from a Technical Recession but the Outlook Remains Grim
South Africa's gross domestic product (GDP) in the third quarter increased by 13.5% compared with the previous quarter and is emerging from the technical recession which lasted for four consecutive quarters and is on the road to recovery, according to new data from the country's statistics office. Since the second half of 2019, South Africa's economy has contracted slightly for three consecutive quarters. After the spread of COVID-19 in South Africa, the South African government believed that it could delay the spread of the disease by imposing lockdown, and prepare medical institutions for response. In late March, the South African government imposed its most stringent five-level quarantine, and most economic activities were "suspended", resulting in a 16.6% contraction in GDP in the second quarter compared with the previous quarter. With the gradual relaxation of epidemic prevention measures, the South African Government is committed to effectively implementing the Economic Reconstruction and Recovery Plan, increasing investment and construction in infrastructure, improving the business environment, attracting investment and promoting industrialization, so as to create more jobs and release economic growth potential. With the gradual recovery of the global economy and the implementation of reform measures, South Africa's GDP grew by 13.5% in the third quarter of this year compared with the previous quarter, and all major industries such as mining, manufacturing, trade and construction achieved growth compared with the previous quarter. However, output in most sectors is still below the level of a year ago, with GDP contracting 7.9% year on year in the first three quarters of this year. The South African Ministry of Finance predicts that the South Africa’s economy will contract 7.8% year on year this year, but it is expected to grow by 3.3% year on year in 2021. In recent days, South Africa has seen clusters of infections in many places, with more than 8,000 new infections in a single day. Health Minister Mukesh announced on December 9 that South Africa has a second wave of the disease. The South African government on December 14 issued a number of policies to close scenic beaches, restrict alcohol sales and extend curfews in hot spots of the epidemic, in a bid to prevent the epidemic from spreading further during the New Year holiday. The measures will continue to weigh on the economy, raising concerns about the prospects for South Africa's recovery.