Main Bulletin: The Real Economy Bulletin - Second Quarter 2021 The Real Economy Bulletin - Second Quarter 2021
In this edition
Gross domestic product: The GDP grew by 1.2% in the second quarter of 2021, up from the (revised) figure of 1% in the first quarter. The economy recovered 19% over the past year from the sharp COVID-induced downturn in the second quarter of 2020. Still, as of the second quarter, it remained 1.4% lower than before the pandemic. The data for the GDP do not, however, reflect either the violent unrest in July or the impact of the severe third wave of the pandemic that hit the country through mid-September. Read more. Read more.
Employment: Despite the relatively rapid growth in the GDP, the Quarterly Labour Force Survey found that total employment flattened out from the first to the second quarter of 2021. South Africa had recovered almost a million jobs since the second quarter of 2020, but total employment was still 8% below pre-pandemic levels. In the second quarter, lower skilled and informal workers saw large job gains, but they were offset by losses for semi-skilled and skilled employees. This outcome likely reflected reduced access to the UIF’s temporary employee relief scheme. Read more.
International trade: South Africa’s trade balance remained strongly positive, with a R163 billion (US$11 billion) surplus in the second quarter of 2021. The record trade surplus was almost exclusively due to the surge in international mining prices, as discussed above. Exports increased 18% from the previous quarter, reaching R491 billion in constant 2021 rands. That represented a 77% increase over the pandemic low point a year earlier. In constant rand, the second quarter of 2021 also saw an increase in imports, but they lagged well behind exports. As a result, the balance of trade rose almost 75% in the quarter. Read more.
Investment: In the second quarter of 2021, investment was around 9% lower than in the first quarter of 2020. It stopped growing in the fourth quarter of 2020. General government and private investment showed the slowest recovery from the COVID-19 pandemic downturn. Moreover, when Statistics South Africa rebased the GDP, it found that the investment rate was overestimated for the past decade. For the second quarter of 2021, it came to a mere 12.8% of the GDP – far below the level generally considered adequate to sustain growth. Read more.
Foreign direct investment projects: The TIPS FDI Tracker tracks foreign direct investment projects on a quarterly basis, using published information. In the second quarter of 2021, 10 projects were identified. The total investment value captured was almost R20 billion from six projects. The majority of investments captured are new projects. There were changes in the status of seven projects previously captured in the Tracker, these were updated accordingly. Read more.
Briefing note: Transnet National Ports Auhority: Operational Vulindlela has targeted key structural reforms in South Africa’s economic infrastructure to strengthen performance, thereby improving the efficiency of the economy and lowering the cost of doing business. One such reform is the establishment of Transnet National Ports Authority (TNPA) as a separate entity within the Transnet Group. But what does this mean and how does it help? Read the briefing note online: Transnet National Ports Authority.
Briefing note: The hospitality industry and COVID-19: Hospitality services – restaurants, hotels, bars and entertainment venues – pose a high risk of contagion as long as COVID-19 is endemic and only a small fraction of the population has been vaccinated. As a result, businesses in the industry have faced plummeting demand and a range of public-health restrictions. The industry is relatively labour intensive, which means its slowdown results in disproportionate damage to jobs and emerging enterprises. Read the briefing note online: The hospitality industry and COVID-19.