Cabinet has expressed confidence that the South African economy will recover despite the country’s Gross Domestic Product (GDP) contracting in 2020.
Cabinet expressed this optimism during its meeting on Wednesday in the wake of Statistics South Africa (Stats SA) revealing that the country’s economy had shrunk by 7 percent in 2020.
During a post-Cabinet press briefing, acting Minister in the Presidency, Khumbudzo Ntshavheni, said Cabinet noted the GDP figures for the fourth quarter of 2020.
During the quarter, real GDP grew by 6.3%, largely as a result of the further easing of COVID‑19 lockdown restrictions.
“The outcome reflected strong growth in household final consumption and manufacturing output. As a result, for the full year of 2020, real GDP contracted by 7.0% – a better outcome than expected,” said the Minister.
During the last three months of 2020, the manufacturing sector grew by 21.1%.
Nine of the 10 sub-sectors recorded increases (led by food and beverages, motor vehicles and parts, and metal and steel products), while trade growth (9.8%) was led by retail trade, motor trade, catering and accommodation.
Agriculture posted its highest annual growth (13.1% for 2020) as a result of favourable weather conditions and improved performance in the grain, horticulture and livestock sub-sectors.
On an expenditure basis, household final consumption expenditure increased at a rate of 7.5%, led by restaurants and hotels; food and non-alcoholic beverages; and recreation and culture sub-sectors.
Gross fixed capital formation increased by 12.1%, led by increased investment in transport equipment and construction works as road passenger and freight activities improved and civil engineering works resumed.
Ntshavheni said Cabinet remains confident that the economy will recover through the prioritised health interventions as well as continued collaborative efforts of government, business, workers and communities in implementing our Economic Reconstruction and Recovery Plan.
Meanwhile, Cabinet has again called on the South African public and businesses tosupport homegrown products and services, to boost economic growth and job creation.
This comes after South Africa this week held the 9th annual Proudly South African Buy Local Summit & Expo, held under the theme: “Localisation as a driver of Economic Growth”.
Proudly South African is an agency of the Department of Trade, Industry and Competition.President Cyril Ramaphosa virtually delivered the Keynote Address at the event on Tuesday.
The summit was live-streamed across multiple online and social media platforms to allow wider participation in the discussions.
A virtual expo allowed companies to showcase their products and services in a short video that provided an online meeting hub for those who want to trade.