The United Union of South Africa (UASA) says the 1,5% gross domestic product (GDP) contraction in the third quarter (Q3) of 2021 paints a grim picture of South Africa’s journey to economic recovery and job creation.
The contraction in the GDP comes after it recorded growth for four consecutive quarters, with last quarter expanding by 1.2%
This quarter’s results have factored in the economic disruptions caused by the civil unrest in July.
Uasa’s Abigail Moyo says the figures are proof that the country is still stuck in the aftermath of the COVID-19 hard lockdowns and the looting spree.
“UASA’s main concern lies with household final consumption expenditure which decreased by 2,4% in Q3, contributing -1,6 percentage points to total growth, resulting in more pressure on low-income households as the cost of living continues to soar high.”
According to Stats SA, the trade, catering and accommodation industry decreased by 5,5%, contributing -0,7 of a percentage point to GDP growth.
Decreased economic activities were also reported for the wholesale, retail, and motor trade as well as catering and accommodation services.
Expenditure on real GDP decreased by 1,6% in Q3 2021.
Moyo says South Africa needs a game plan and a turnaround strategy towards economic recovery and sustainability for the country.