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The fact that South Africa’s second-quarter (Q2) 2020 GDP numbers are dire doesn’t come as a complete surprise, given that much of that period was spent under hard lockdown, with multiple sectors of the economy all but shut.

Still, the quarter-on-quarter fall is our fourth successive decline, and the 51% shrink in our GDP (on an annualised basis compared to the previous quarter, but more on that later) is worse than many had predicted, with market expectations around the 47% mark.

The latest quarter is the steepest decline since at least 1990 and brings our recession into a fourth quarter, which is the longest consecutive decline since 1992.

If you like graphs, this from Stats SA should drive the point home:

You only need to understand that red is bad to know that’s not at all pretty.

According to Moneyweb, all industrial sectors declined, and the only sector to show growth was the agriculture, forestry and fishing industry:

• The manufacturing industry contracted by 74.9%
• The trade, catering and accommodation industry decreased by 67.6%
• The transport, storage and communication industry decreased by 67.9%
• The mining and quarrying industry decreased by 73.1%
• The finance, real estate and business services industry decreased by 28.9%
• The agriculture, forestry and fishing industry increased by 15.1%

Ready for another kick in the downstairs? Here’s the Daily Maverick with some hard truths:

…talk of a “recession” – this was the fourth straight quarter of economic decline – hardly captures the scale of the catastrophe. This is a depression-level event and one that is steroid-charged.

…if the economy, as measured by GDP, is smaller at the end of 2020 than current expectations, then the expected debt-GDP-ratio will be even worse, which will further raise the cost of borrowing. It will also mean less revenue will flow to the Treasury, raising its borrowing requirements.

Across the board, the data is simply an unremitting saga of woe.

Wow, this is spiralling.

Shall we try and finish on something more upbeat? This is basically us polishing a turd, but here we go, via Business Insider SA:

The headline number of 51% doesn’t mean that the economy more than halved in the second quarter.

In fact, the economy shrank by “only” 16.4% from the first quarter to the second quarter. And compared to the second quarter in 2019, the economy was 17.1% smaller.

We should also point out that the 17,1% drop from the same quarter last year is in line with numbers coming out of countries like Italy, Spain, France, Portugal, and the UK.

You can find further analysis of the latest Stats SA figures here.

When considering the 51% number, remember that is the adjusted, annualised rate, which assumes that the economy will perform as it has in Q2, for the next three quarters.

Given that we’re out of the strictest part of lockdown, and hopefully will not return, it’s unlikely that the economy will continue to contract at such a rapid rate.

The 51% number will thus drop, with estimates placing our GDP’s contraction over the year between 7% and 11%.

Still a dire situation, but something to cling to.

[sources:moneyweb&dailymav&businsidersa]