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SA Waits With Bated Breath Ahead Of Economic Data

9 March 2021 – South Africa’s full-year GDP contraction will become known tomorrow when fourth quarter (Q4) data for 2020 is released, possibly confirming predictions of a 7% decline in annualised growth because of the impact of the coronavirus on the economy.

However, based on the latest weekly roundup by the Bureau for Economic Research (BER) at Stellenbosch University, it is hoped that the following day’s release of the Business Confidence Index (BCI) by Rand Merchant Bank and the BER will confirm recovery so far this year.

“Along with the Purchasing Manager’s Index and vehicle sales data, this will provide the first indication of how the economy performed through the peak of the Covid-19 second wave during January and into March,” the Bureau said.

“Tuesday’s data will complete the picture for 2020 and provide the first official estimate of the magnitude of the GDP decline due to the Covid-19 health crisis and the associated lockdown restrictions.”

The BER added that after GDP had surged back in 2020 Q3 after the second quarter collapse, it expected a sharp moderation in the fourth quarter.

It should be kept in mind though that GDP annualised recovery was 5.5% quarter-on-quarter, but that the pandemic’s pummelling effect, for the most part due to stringent lockdown measures, has substantially eroded the country’s GDP. Source (FreightNews)