CHRIS GILMOUR: Second quarter GDP figures are a wake-up call
There is likely to be some growth in the third quarter, off the extremely low base of the second quarter, but beyond that it becomes difficult to make any meaningful forecasts
SA’s second-quarter GDP figures were shocking. It will take many years just to get back to the 2019 level of GDP, and if government does not accept that profound structural reform of the economy is essential in achieving sustained economic growth, then the process will take even longer. Additionally, the likelihood of continuing rolling blackouts will throttle any growth that might otherwise be achieved.
One point to clarify is the definition of GDP movements and thus the extent of the GDP collapse in the second quarter. The most widely publicised and in fact highlighted on the front page of Stats SA’s own release, is the quarter-on-quarter annualised figure of -51%. This measure assumes that the actual quarter-on-quarter decline will be perpetuated for the next three quarters to arrive at the sensationalist figure of a 51% contraction.