The decline of South Africa’s manufacturing production by 30.2 percent between April and June was an indication that the country’s gross domestic product (GDP) in the second quarter would also shrink, said expert.
Jannie Rossouw, head of School of Economic and Business Sciences at the University of the Witwatersrand, told Xinhua, “This shows that there will be a big decline of the GDP in the second quarter and some decline in the third quarter. The economy will be in a recession the whole of 2020.”
Statistics South Africa (Stats SA) said this week that manufacturing production fell by 30.2 percent between April and June compared with the first three months of the year while all 10 manufacturing divisions reporting negative growth rates over this period.
Stats SA’s director of industry Nicolai Claassen attributed the decline to the “extensive impact COVID-19” had on the economy.
“The automotive division experienced the biggest fall, recording a 62.8 percent slump in production,” he said.
Rossouw said because of economic inactivity between April and June, the results were to be expected.
“While the decline in the manufacturing production is not surprising, the numbers are shocking,” he said, adding that the manufacturing sector would improve “as the economy continues to strengthen and recover. The results might be better in the fourth quarter.”