South Africa GDP shrinks after short-term gains

By Vumani Mkhize

South Africa’s gross domestic product has shrunk by 1.5% in the third quarter, ending a period of four consecutive quarters of tentative growth.

The looting and unrest that rocked parts of the country in July had a direct bearing on the contraction.

The civil unrest saw many businesses in the KwaZulu-Natal and Gauteng provinces come to a complete standstill, decimating economic activity.

The biggest contributors to the drop in GDP are trade, manufacturing and agriculture.

Household spending is also constrained and is exacerbated by record unemployment which is at 35%.

Current economic activity is only at 2016 levels, a clear indication of the devastating effects the Covid-19 pandemic has had on the economy.

This article originally appeared on BBC News

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