Displaying items by tag: GDP

Main Bulletin: The Real Economy Bulletin - Second Quarter 2020

In this edition

The GDP: As expected, the GDP dropped sharply, by 16% in seasonally adjusted terms, in the quarter ending in June 2020 as a result of the COVID-19 pandemic. Economic activity crashed in April, during the strict Level 5 of the lockdown. The gradual relaxation in restrictions since then have seen a bounce back to near pre-pandemic levels. Still, COVID-19 continues to pose a threat, limiting recovery especially in tourism and recreational services even in the absence of regulations. Moreover, long-standing structural challenges and declines in major trading partners will slow recovery. Read more.

Employment: Because it is difficult to undertake household surveys during a pandemic, the Quarterly Labour Force Survey has been delayed until late October. As a result, there are no official figures for second quarter employment. Read more.

International trade: The pandemic brought a sharp slowdown in global trade as a result of blockages to transport as well as falling international demand. For South Africa, the second quarter of 2020 saw a strong decline in goods exports, combined with an even stronger slump in goods imports. Only agricultural exports performed well, increasing by 14.2% in dollars and, thanks to depreciation, by 38% in constant rand terms. Read more.

Investment: Investment tumbled in the second quarter. Monthly data are not available, however, so it is not clear if there was any recovery over the quarter. Private investment fell by a fifth, investment by state-owned companies by a third, and general government investment remained almost unchanged. As a result, in the second quarter of 2020 investment fell to 16% of the GDP from 17% in the first quarter. That is the lowest investment rate since 2010. Read more.

Foreign direct investment projects: The TIPS FDI Tracker tracks foreign direct investment projects on a quarterly basis, using published information. Eight projects were recorded this quarter, and two projects were updated in status. The total quantum of new investments recorded was approximately R2.6 billion, from six projects. Read more.

Briefing note: Stimulating consumer spending post COVID-19 lockdowns: Consumption spending by households is an important driving force of an economy. In 2019, household consumption spending accounted for 61% of the R5.1 trillion expenditure on gross domestic product. Spending on essential goods and services such as food, transport, health and education accounted for 62.3% (or R1.9 trillion) of final household consumption. Spending on non-essentials like recreation and culture as well as restaurants and hotels accounted for 7.2% (or R219.6 billion) of final household consumption. However, in 2020, the COVID-19 lockdown has and will continue to negatively impact consumer spending in the absence of alternative incomes or financial resources for those consumers. Read the briefing note online: Stimulating consumer spending post COVID-19 lockdowns.

Briefing note: Unblocking the potential of South African green hydrogen in trade: Globally, countries are mobilising sizeable resources towards dealing with the climate crisis, and with the COVID-19 pandemic many countries and regions have attached sustainability criterion to their recovery packages. EU Member States, for example, have attached strict mitigation regulations to COVID-19 rescue packages and state recovery support in sectors with limited options for decarbonisation, such as aviation. Further, as part of the transition to sustainable production, trade barriers against high-carbon exporters through policy tools such as border carbon adjustments are expected from large trading blocs such as the EU from as early as 2023. The climate policy responses by countries to changing trade policies differ, however, what is certain is that the nature of trade, production and investment will change in this transformation. Read the briefing note online: Unblocking the potential of South African green hydrogen in trade.

Published in Quarterly Bulletin

Main Bulletin: The Real Economy Bulletin - Fourth Quarter 2019

Data sheer: Data Second Quarter

In this edition

Trends in GDP growth: GDP growth in 2019, at 0.2%, was the lowest since the global financial crisis in 2008/9. The economy reportedly contracted in the last two quarters of the year as well as the first quarter. The slowdown reflects a combination of demand-side factors, resulting from slower global growth and a pro-cyclical (although far short of austerity) fiscal and monetary stance, combined with the supply-side drag of Eskom loadshedding and increasingly harsh and frequent droughts as the climate crisis intensifies. Read more.

Employment: Construction employment continued its downward trend, with the loss of 130 000 jobs, or 9% of its total workforce, in the year to the fourth quarter of 2019. Manufacturing also saw net job losses in this period. In contrast, agriculture gained 36 000 jobs. The rest of the economy reportedly created half a million new employment opportunities. Read more.

International trade: From the third to the fourth quarter of 2019, South Africa’s exports and imports fell in both constant rand and US dollar terms.  The balance of trade improved because of the relatively sharp fall in imports, largely due to slower economic growth. Read more.

Investment and profitability: Investment was generally depressed in 2019, mostly as a result of the decline in public investment. Private investment fell in the final quarter, although it increased over the year. Profitability continued to fall in manufacturing and dropped in construction. Mining saw some improvement, mostly because the value of its assets fell even faster than its profits. Read more.

Foreign direct investment projects: The TIPS FDI Tracker tracks foreign direct investment projects on a quarterly basis, using published information. The total investment value captured this quarter was R52.4 billion. Read more.

Briefing note: Coronavirus - impact of an economic slowdown in China on the South African economy:  The global economy is facing an economic slowdown as a result of the coronavirus disease (COVID-19) that began in China and had spread to at least 50 other countries by late February. China is now the world’s second biggest economy, and South Africa’s largest single trading export destination as well as its largest export market. With the situation changing rapidly, it is important that South Africa keep track of the developments and undertake contingency planning to prepare for the impacts on the economy and on jobs. Read the briefing note online: Coronavirus - impact of an economic slowdown in China on the South African economy.

Briefing note: Budget 2020 and funding for industrial policy: With a depressed economy, the 2020 budget was bound to be a delicate balancing act. Entitled Consolidation, Reform and Growth, it acknowledges a weak economic outlook, low growth, tax revenue shortages, higher debt service costs and concerns with public finances and fiscal deterioration. Read the briefing note online: Budget 2020 and funding for industrial policy.

Published in Quarterly Bulletin

Main Bulletin: The Real Economy Bulletin - Third Quarter 2019  

In this edition

GDP growth: For the second time this year, the GDP contracted in the third quarter of 2019. In the past two years, the economy has reportedly shrunk in four quarters, underscoring the effects of the slowdown. Reported GDP growth has also become unusually erratic, with the economy growing reasonably strongly when it was not actually shrinking. Read more.

Employment: Total employment remained virtually unchanged over the past year. Construction lost 160 000 jobs, however, which was offset by growth in other industries. Quarterly figures are hard to interpret because they are not seasonally adjusted. Read more.

International trade: In constant rand, South African exports have increased slightly since 2014, while imports are lower than they were five years ago despite some increases in the past two years. Read more.

Investment and profitability: Private investment recovered over the year to September 2019, with a particularly sharp increase in the second to third quarter 2019. This growth reversed a decline over the previous three years. In contrast, both the government and state-owned corporations (SOCs) saw a fall in investment. Read more.

Foreign direct investment projects: The TIPS FDI Tracker tracks foreign direct investment projects on a quarterly basis, using published information. In the third quarter of 2019, 16 projects were added to the FDI Tracker. Investment values were available for 11 of these projects, and the pledged value came to R13 billion. Read more.

Briefing note: Responding to the economic slowdown: The GDP has for the second time this year slipped into negative territory. Since 2015 the economy has struggled to break free from sluggish performance. An appropriate policy response, however, requires an accurate diagnostic. In particular, we need to understand why growth has slowed steadily since before 2011, not only in South Africa but globally. Read the briefing note online: Responding to the economic slowdown.

Briefing note: SAA by the numbers: In the first week of December 2019, South African Airways (SAA) was put into business rescue.This briefing note provides an overview of its financial position, which left government with no other realistic option. Read the briefing note online: SAA by the numbers

Published in Quarterly Bulletin

Business Day - 30 September 2019 by Neva Makgetla (TIPS Senior Economist)

Read online at Business Day. 

Or read as a PDF.


Stats SA's seasonal adjustment models are part of regular rebasing: Business Day - 3 October 2019 by Michale Manamela (Chief director of national accounts at Stats SA)

Read online at Business Day.

Published in TIPS In the News