South Africa’s economy contracted by 1.5% on a quarter-on-quarter seasonally adjusted basis in the third quarter of 2021, highlighting the extent of the damage that July’s riots wrought on an already fragile economy.
The contraction comes after four consecutive quarters of growth. The economy grew by 1% in the first quarter and a revised 1.1% in the second quarter, Statistics South Africa said in its latest GDP report on Tuesday.
But the economy, at 3.1%, is smaller than it was before the Covid-19 pandemic, which caused it to contract 6.4% last year.
The largest drops in the third quarter were in the agriculture sector, which tumbled 13.6%, while trade was down 5.5% and manufacturing fell by 4.2%.
Economists had previously said that third-quarter growth was likely to be soft as a result of stricter Covid-19 lockdown regulations and the looting and unrest that hit Gauteng and Kwa-ZuluNatal in July.
Economist Sanisha Packirisamy predicted in September that momentum behind GDP growth would probably not continue into the third quarter, saying: “I think we are going to see a deterioration in the third quarter before slightly picking up in the fourth quarter.”
Anathi Madubela is an Adamela Trust business reporter at the M&G.