Q1 GDP still 3.2% y-o-y smaller

Full-year economic growth will be influenced by lockdown restrictions

Statistics South Africa (StatsSA) reported on June 8 that the South African economy expanded by 1.1% quarter-on-quarter (q-o-q) and by 4.6% q-o-q on a seasonalised adjusted an annualised rate (saar). Despite the positive growth rate, the economy was still 3.2% year-on-year (y-o-y) smaller during the period. This was slightly worse than the 3.0% y-o-y decline projected by a survey of local economists but less severe than the y-o-y readings seen since 2020Q2. The negative y-o-y reading reflects an economy which remains smaller than it was in the pre-pandemic (2020Q1) period before strict lockdown measures resulted in a large recession during the second quarter of last year.

Three out of ten industries tracked by Stats SA recorded y-o-y growth in the first quarter: agriculture, government services and mining. This means that these sectors are now larger than the pre-pandemic period. Agriculture, which has been steadily growing since mid-2019, expanded by 7.5% y-o-y in 2021Q1. General government services continued with its long-standing expansion – albeit at a slower pace compared to a y-o-y growth rate of 0.5% seen from x to y. The mining sector was one of the largest contributors to overall growth with an expansion of 3.5% y-o-y. South Africa measured a 25.1% y-o-y increase in exports during 2021Q1 on the back of a 32.4% y-o-y increase in the value of mineral sales. This, in turn, was driven by a recovery in global mineral demand and rising international commodity prices.

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