South Africa records -2 percent GDP growth for first quarter of 2020

The drop in GDP growth marks the third consecutive decline since the third quarter of 2019.

According to Stats SA, South Africa has recorded a decline in gross domestic product (GDP) in the first quarter of 2020, deepening the recession it entered into at the start of the year. 

The GDP growth for the first quarter was recorded at -2 percent, marking the third quarter of decline in succession, following drops of 0.6 percent in the third quarter of 2019 and 1.4 percent in the fourth quarter of 2019. 

However,the data only reflects the first three months of 2020, before the nationwide lockdown was fully implemented on 27 March. This means that the economic turmoil as a result of industries and business sectors being shut is not represented in the latest data. 

Stats SA states that a drop was seen across half of the sectors assessed, with the biggest declines seen in mining and manufacturing.

The mining and quarrying industry decreased by 21.5 percent and contributed 1.7 percentage points to GDP decline. Decreased production was reported for iron ore, manganese ore, other metallic minerals and chromium. 

The manufacturing industry contracted by 8.5 percent in the first quarter. Seven of the 10 manufacturing divisions reported negative growth rates in the first quarter. 

The divisions that made the largest contributions to the decrease were petroleum, chemical products, rubber and plastic products; basic iron and steel, non-ferrous metal products, metal products and machinery; and motor vehicles, parts and accessories and other transport equipment.

The electricity, gas and water industry contracted by 5.6 percent in the first quarter, largely due to decreases in electricity distributed and water consumption. 

The construction industry decreased by 4.7 percent with drops reported for residential buildings, non-residential buildings and construction works. 

The agriculture, forestry and fishing industry increased by 27.8 percent and contributed 0.5 of a percentage point to GDP growth, which was mainly due to increases in the production of field crops, horticultural products and animal products.

Finance, real estate and business services also increased by 3.7 percent in the first quarter.

General government services increased by 1 percent, mainly attributed to increased employment in provincial government and higher education institutions.