South Africa GDP Q3 2020

South Africa

South Africa: Economy rebounds robustly in Q3 amid easing of lockdown restrictions

December 8, 2020

The economy rebounded strongly in the third quarter, growing at the quickest rate since current records began in the early 1990s, as the easing of coronavirus lockdown measures enabled the gradual firming of activity. GDP surged 66.1% at a seasonally-adjusted annualized rate (SAAR) in Q3, swinging from the 51.7% contraction seen in the second quarter and beating market analysts’ expectations of a 52.6% rise. In annual terms, economic activity dropped 6.0% in Q3, marking a softer contraction than the previous quarter’s 17.5% decline.

The robust bounce-back reflected notable improvements in domestic as well as external demand. Private consumption jumped 69.5% SAAR in Q3, contrasting the 52.4% contraction in Q2, as consumers resumed their purchases. Furthermore, fixed investment surged 26.5% in the quarter, swinging from Q2’s 59.8% contraction, while government consumption rebounded, growing 0.7% in Q3 (Q2: -2.1% SAAR).

On the external front, exports of goods and services rebounded, growing 201.4% in Q3 (Q2: -76.0% SAAR) as global demand picked up. In addition, imports of goods and services fell at a softer pace of 1.6% in Q3 (Q2: -54.0% SAAR), suggesting a firming of the domestic economy.

Commenting on the outlook for the South African economy, Andrew Matheny and Dylan Smith, economists at Goldman Sachs, noted:

“Today's data imply a mechanical adjustment to our 2020 growth forecast to -7.2%yoy, 1.1pp stronger than previously (while incorporating a slightly weaker sequential growth rate in Q4). Our 2021 growth forecast now stands at +5.3%yoy, up from +4.5% previously. We also revise up our forecast for the Q3 current account balance […] to a surplus of 4.6% of GDP or ZAR230bn (annualised), up from 4.2% of GDP or ZAR210bn previously, on account of weaker service imports than we had anticipated.”

FocusEconomics Consensus Forecast panelists project the economy to expand 3.6% in 2021, which is unchanged from last month’s forecast. In 2022, GDP is seen growing 2.5%.


Author:, Economist

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South Africa GDP Q3  20 20 1

Note: Quarter-on-quarter seasonally adjusted and annualized changes of GDP in %
Source: Statistics South Africa (Stats SA) and and FocusEconomics Consensus Forecast.


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