Q2 GROWTH FIGURES 2ND LOWEST IN SACU

MBABANE – The country’s economic growth figures for the second quarter of this year are among the lowest when compared to that of its SACU counterparts.

Eswatini is a member of the Southern African Customs Union (SACU) alongside Botswana, Lesotho, Namibia and South Africa. Last week, this publication exclusively reported that the country’s economy grew by only 0.6 per cent on a quarter-to-quarter (Q-Q), seasonally adjusted basis during the second quarter of the year.  The Q-Q seasonally adjusted growth rate measures the change from subsequent quarters.

increase

The increase was only the 0.6 per cent following an increase of 2.6 per cent in the first quarter of this year. On a year-on-year, second-quarter gross domestic product (GDP) increased by 17.5 per cent.  Notably, the second quarter of last year was hit by a hard lockdown to curtail the spread of COVID-19. Comparisons made by this publication showed that these figures were among the lowest in the SACU region, as they were only better than Botswana’s. Regional powerhouse, South Afric’s, economy recorded its fourth consecutive quarter of growth, expanding by 1.2 per cent in the period April–June 2021. This followed a revised 1.0 per cent rise in GDP in the first quarter.For Namibia, the domestic economy rebounded into a positive trajectory, recording a positive performance of 1.6 per cent during the second quarter of 2021.

Botswana’s economy, on the other hand, grew by 0.2 per cent on a quarter-to-quarter seasonally adjusted and 36 per cent year-on-year. Lesotho’s quarter two figures were yet to be released by the Bureau of Statistics at the time of compiling this report. There are fears that Eswatini’s economy might deteriorate further in the third quarter following the damage done to key sectors (retail and wholesale) during violent protests late in June.

indicators

Analysts say GDP is one of the most common indicators used to track the health of a nation’s economy. It is perhaps the most closely watched and important economic indicator for both economists and investors alike because it is a representation of the total value of all goods and services produced by an economy over a specific time period. Real GDP is how economists can tell whether there is any real growth between one year and the next. Meanwhile, in the past week’s report, the country’s Central Statistical Office (CSO) reported that the primary sector which contributed 10 per cent to total Industries in the second quarter of 2021 showed an increase of 24.7 per cent year-on-year. The realised growth was due to an increase in animal production, forestry and mining. The secondary sector which contributed 34 per cent to total industries indicated an increase of 45.4 per cent in the second quarter year-on-year. “The growth in this sector is mainly due to an increase in manufacturing and construction by 50 and 17 per cent, respectively.

overall

“The tertiary sector which contributed 57 per cent of total industries shows an overall increase of 6.2 per cent in 2021 quarter two year-on-year,” reads the report. This tertiary sector increase was due to improvements in wholesale and retail trade; repair of motor vehicles (12 per cent); transportation and storage (22 per cent); accommodation and food service activities (70 per cent); and information and communication (seven per cent). An economist, on condition of anonymity, said while the mass vaccination campaign might help in opening some sectors of the economy; the recovery could take longer after the damage done by the destruction of businesses.

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