Economy / General

Supplementary budget lays bare the challenges ahead

SA remains in recessionary territory

GDP numbers “better-than-expected”, but a depression may be looming

The market expected the economy to shrink by 3.8% over the first quarter so the -2.0% print for Q1 2020 GDP (quarter-on-quarter, seasonally adjusted and annualised) might be slightly better than anticipated, but it almost means nothing. This performance takes us only up to the end of March so it includes less than five working days of the lockdown.

GDP in the first quarter of 2020

The South African economy endured its third consecutive quarter of output contraction, with GDP growth of -2.0% during the first quarter. Though this is a poor outcome, it is somewhat better than expected, with economists having anticipated closer to -4.0% quarter-on-quarter.