PODCAST | Economic news of the week: The GDP numbers are grim, but where to from here?

GDP in the second quarter of 2020.

Weimar says the results were worse than most had expected, with her team having forecast a 47.5% contraction. Everyone knew Covid-19 had hit the economy. The question until this week was how much the contraction would be. It was “slightly worse than expected”, she says.Explaining Stats SA’s findings, Weimar says the economy shrank by 16% “if you compare it to the second quarter last year”.

Outside these figures, she says, the bigger picture to consider is where the economy stood at the end of the first two quarters, or the first half of the year. How much smaller was SA’s economy in the first half of 2020 compared to the same period in 2019? That contraction sits at 8.7%, says Weimar. Together with the third quarter, this usually gives an indication of what the full-year figures will be.

Weimar also talks about what these latest figures mean for SA’s perception by international ratings agencies — Moody’s Investors Service, Fitch Ratings and Standard & Poor’s, which all have SA rated at “junk”. She also gives her thoughts on public and state finances, the effect of load-shedding on SA’s pace of recovery, an outlook for the economy and how other African countries in the region have fared, given different lockdown levels.

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