When South Africa went on lockdown back in March, a lot of changes took place.A number of industries had to shut down as the economic activity came to a stand still.This led to a number of people losing their sources of income and hence having to face difficulties in having to sustain themselves.
BAD NEWS FOR SOUTH AFRICA
Even though the economy was further opened under lockdown level 2 ,some industries are still struggling to get back to their feet .
Fin24 news today made a report of an update that will sadden the whole of South Africa. This was after it was reported that Statistics South Africa made a sad announcement on Tuesday morning that the South African economy had contracted by 51% in the second quarter of the year 2020.
Still moving on , Fin24 news reported that prior to the announcement , the South African rand came under pressure to trade and it was more than 1% weaker against the United States dollar. It was further heard that the local currency opened the day's trade at about R16.7 to the greenback. It was further reported by Fin24 that it was changing hands at R16.94 per US$ in the early afternoon.
Fin24 went on to reveal that in accordance to Statistics SA, the plunge was caused by the impact of the Covid-19 shutdown since March the 26th .
It was further reported that this extended South Africa's recession for yet another quarter, with the economy of the country continuing to combart the Covid-19 pandemic and the ever- growing unemployment.
Fin24 would report as well that the second quarter of the year included the months April, May and June, a period when the country's strictest lockdown measures were put in place.
Still moving on ,Fin24 reported that South Africa entered its second recession of President Cyril Ramaphosa's administration during the last half of 2019.It is further heard from Fin24 that the data that was released by Statistics SA on the morning of Tuesday meant that the GDP had now fallen in the past four quarters in succession.
Still moving on , Fin24 informed that Izak Odendaal, who is the Investment strategist at Old Mutual Multi-Managers, indicated that after with the data released on Tuesday by Statistics SA , the following were taking place;
●the quarterly GDP figures were bleak
● the year on year figure was not as quite as stark.
Fin24 would continue to report on Odendaal's view, who said that this was historically a bad contraction as stipulated by Statistics SA .
He is reported to have said that this was worse than what other countries have seen.He said that even though these contractions have been seen in other countries, they were annual not quarterly.
Fin24 would report that Odendaal stated that the fact that agriculture was the only means of positive contributor in the quarterly figures,it meant that once the economy would start to recover, it would mean that the upswing would likely be driven by South Africa's primary and secondary sectors.
Odendaal also stipulated that it was encouraging, and that the crop estimations for 2020 were expected to be good. He said that pressure on consumers would continue, while the recovery would be driven by primary and secondary sectors, reported Fin24.
With the release of the first quarter GDP figures in the month of July, that indicated that South Africa's economy had contracted by 2%, it was estimated by the Treasury that it expected Mzansi's GDP to even contract by 7.2% for the year 2020, according to the Fin24.
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