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South Africa’s Gross Domestic Product (GDP) showed an increase of 1.2% in the fourth quarter (Q4) of 2021 bringing the annual real GDP increase to 4,9%.

This is good news, painting a positive picture against the unforeseen tough economic circumstances inflicted by Covid-19, the July looting unrest and high unemployment rate. However, this growth occurred from a low base as the economy shrank by 6.4% in 2020. The 4.9% growth did not bring more jobs to workers, as almost 750 000 fewer people were employed in Q3 2021 than in Q3 2020.

It is pleasing to note that household consumption expenditure increased by 2.8% in Q4 2021, contributing 1.8 percentage points to total growth. Household consumption expenditure was driven by strong growth of 13.2% in restaurants and hotels, 7.6% in spending on household furnishings and equipment, 4.7% in alcoholic beverages, tobacco and narcotics, 4.3% in clothing and footwear, and 3.9% in food and non-alcoholic beverages.

The highest growth rates were reported for expenditures on durable and semi-durable goods, showing that even low-income households had some disposable income.

The events in Ukraine will without a doubt negatively impact growth in 2022 depending on the future form and shape of the war and whether it will expand to other countries, as will load shedding and the slow pace of economic reforms.

UASA again calls on government to collaborate with the private sector towards job creation and economic recovery, especially now that decelerated growth and increasing fuel and food prices are a reality against the background of the Ukraine war.

Issued by Abigail Moyo, spokesperson of the trade union UASA