GDP and the valium economy



You could almost hear the nation holding its breath this Tuesday as the gross domestic product (GDP) figures for the second quarter were released. Would Statistics South Africa (Stats SA) record another negative quarter, meaning the country would be in recession yet again?

And — even if Stats SA told us things were better than we thought — would this make any real difference to the collective mood, which appears to hover between hopelessness and despair?

But no need to reach for the valium: the numbers were up, by 3.1% from the first to second quarters, largely because Eskom kept the lights on. This puts our annual growth at 0.9%. It’s low, yes, but, if you want to look on the bright side, at least it’s not negative.

The market liked the news, with the rand moving from R15.13 to R14.83, according to Fin24.

But don’t get rid of any spare valium. In a briefing on Wednesday, Eskom said that supply remained constrained and would not rule out load-shedding this summer.

If load-shedding does occur, it will affect the economy again. And our economy has not expanded more than 2% since 2013. Hold your breath, or don’t; reach for valium, or don’t, but the truth is numbers do not lie. And South Africa’s numbers have been weak for a very long time.

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever. But it comes at a cost. Advertisers are cancelling campaigns, and our live events have come to an abrupt halt. Our income has been slashed.

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Tshegofatso Mathe
Tshegofatso Mathe is a financial trainee journalist at the Mail & Guardian

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