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South Africa’s GDP Growth Hits 13.5% in Q3, 2020

While the South African economic data announced an unexpected growth of the gross domestic product during the third quarter of 2020, the main stock market index of the local financial market experienced its first decline in 6 sessions, we noted.

The FTSE South Africa, which includes all companies listed on the Johannesburg Stock Exchange, was down 0.5% on Tuesday, December 8, 2020.

However, GDP jumped by 13.5% during the third quarter, compared to the previous quarter. This performance was driven by the rise in industrial production (+210.2%). With the easing of lockdown measures, activities resumed in the agro-industrial sector thanks to household consumption, which grew by 70%.

For example, there was an increase of more than 7,000% in the revenues of restaurants and hotels, and 673% for drinks and other alcoholic products. The fall in the main indices of the Johannesburg Stock Exchange can be attributed to a cautious reallocation of resources in investment portfolios.

The economic recovery is opening up new prospects and the financial products that have served as a refuge are beginning to be sold off. However, investors keep in mind that this exceptional growth is also linked to the impact of covid-19 on the South African economy. Despite its current rebound, the country’s GDP has fallen by 6% since the beginning of the year.

Ecofin Agency Idriss Linge

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