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Economic growth still bouncing from low lockdown base

By: Johann van Tonder, Economist at Momentum and Herman van Papendorp, Head of Investment Research & Asset Allocation at Momentum Investments. 


  • The South African economy contracted by 7% in 2020 compared to 2019. 
  • In the fourth quarter of 2020 the economy grew 6,3% quarter-on-quarter seasonally adjusted and annualised (q/q saa) following an upwardly revised 67,3% in the third quarter of 2020. 
  • Agriculture and general government were the only sectors that made positive contributions to economic growth in 2020. 
  • The manufacturing sector made the largest contribution to economic growth in the fourth quarter of 2020 (2,4 percentage points), followed by trade (1,3 percentage points). 
  • Company operating profits and household income recovered further in the fourth quarter. 
  • Measured from the expenditure side, the economy grew 6,5% in the fourth quarter of 2020 from an upwardly revised 68,1% in the third quarter. 
  • Exports, household expenditure and inventory accumulation contributed most to economic growth in the fourth quarter. 
  • Given the partial closure of the economy during the first two months of the first quarter of 2021, the quarterly growth rate is expected to level off. 
  • The outlook for 2021 is moderately promising at this stage, with growth of around 3,4% expected. 

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