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S/Africa’s Economy Shrinks 1.5% In Q3 As Riots, COVID-19 Hamper Activity

Indications that civil unrest and lingering COVID-19 pandemic are stalling policy measures by government to keep South Africa’s economy on sustainable growth trajectory emerged on Tuesday with the country’s economy shrinking by 1.5 percent in the third quarter of this year.

The Q3, 2021 figures represented the first time the country’s economy contracted in a year after four consecutive quarters of growth as riots and tighter COVID-19 pandemic restrictions continue to disrupt the nation’s economic activity

A statement by the Statistics Agency of South Africa on the economy’s performance indicated that the Q3,2021 contraction eroded “some of the economic gains the country has made since the severe impact of Covid-19 in the second quarter of 2020.”

Specifically,  the agency reported that the economy under-performed “under the twin pressures of tighter Covid-19 lockdown restrictions and a spate of civil disorder in July, as well as several other headwinds.”

A further analysis of the economic sectors’ performance showed that Trade, Catering and Accommodation industries fell by 5.5 percent just as the real sector (manufacturing) shrank by 4.2 per cent. Similarly, agricultural activity plunged by 13.6 percent, representing the sector’s biggest decline in five years.

It would be recalled that a spree of arson and looting rocked parts of South Africa in July following the jailing of ex-president Jacob Zuma for contempt.

In addition,  the Africa’s most industrialised country which had been worst hit by the pandemic in the continent, was compelled to tighten coronavirus restrictions that month to tackle a third wave of infections.

A hard lockdown imposed in March last year brought many industries to a standstill, and rolling restrictions have continued to stifle business.

The economy, which was projected by analysts to grow by 5.1 percent in 2021 last month, contracted by a record 6.4 per cent in 2020, but rebounded faster than expected during the first half of this year.

 

 

 

 

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