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Statement of the MEC for EDTEA in KZN following the release of second quater of 2022, SA Economic Results

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Statement of the MEC for EDTEA in KZN following the release of second quater of 2022, SA Economic Results

7th September 2022

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MEC for EDTEA Mr. Siboniso Duma has welcomed the announcement by Statics South Africa’s on the South Africa economic results of the second quarter of released on Tuesday the 6th of September 2022

Statistics South Africa is central in the monitoring of the performance of the economy of South Africa with a mandate of providing timely and accurate facts in economic activity over industries and economy sectors. Stats S.A feeds the micro-and-macro economic environment with necessary facts to make critical decisions for government’s intervention in terms of policy and other economic instruments to improve economic performance and outcomes. 

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Much as the stats shows an economic decline of 0.7% in the second quarter of 2022, but as government of KwaZulu Natal we remain optimistic of a positive recovery over time given the economy recovery plan the province is implementing

The MEC further noted the key highlights of the report and it's impact to the people of Kwa Zulu Natal.

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The second quarter report notes that; “Economic activity in the manufacturing industry shrank by 5.9%, in part due to the impact of the flooding in Kwazulu-Natal, which killed over 400 people and wrecked infrastructure in April”. The Stats S.A released report also goes on to highlight numbers and factors in other sectors that make up the second quarter results, it notes amongst other facts that;

“The agriculture industry decreased by 7.7% in the second quarter, while mining and quarrying industry shrank by 3.5%. Load shedding took its toll on industry, as well as higher interest rates also weighed on growth. Added to these negatives are knock-on effects of the Ukraine invasion, in particular higher food and fuel prizes”. 

The MEC also note that [indeed] these numbers are coming out in an economic context that is in ‘general recovery mode’ across South Africa. He remarks that he is pleased with the positive headwinds that are emerging in one or two sectors that are showing resilience during this difficult economic phase. 

“Finance, real estate and business services industry continue to grow, rising by 2.4% in the second quarter”. Writes the Stats S.A second quarter of 2022 economic report. 

In a median expectation from amongst economists polled by a Bloomberg survey, the contraction of 0.8% was an expectation, therefore there is a slight relief that the current contraction is slightly better than expected. 

The MEC further notes that there is a positive trajectory on quarter 2 as compared to the same quarter in 2021 and 2022. The report noted that “Real GDP for the first half of 2022 was 1.4% larger than in the same period in 2021”. 

The MEC notes that Kwazulu-Natal provincial economy has taken a highlight as a major factor in the numbers released in the second quarter of 2022, part of the factors leading to downturn of the economy in the province was the July 2021 unrest, which impacted serverly in the retail and tourism sectors, as highlighted in Statics SA second report As the province, we are comforted by the fact that the Department of Economic Development, Tourism & Environmental Affairs together with it's Entities are hard at work in implementing ‘post-lockdown integrated recovery plans which are aimed to fast-tracking and rebooting of the provincial economy.

As Finance News 24 reported last year, that the South African economy grew by 4.9% as it started to recover from a 6.4% slum in 2020 due to the pandemic-related lockdown, the economy started to reach it's pre-pandemic size in the first quarter of 2022 - a year earlier than expected, which was encouraging.

The MEC notes with great concern the facts that the second quarter economic report brings forward and how these numbers affect the people of the province in real terms. Therefore notes that this contraction of 0.7% does make the pre-pandemic recovery appear to be short lived, as it drags the GDP back below the pre-pandemic levels. 

The MEC commits the Department of Economic Development, Tourism and Environmental Affairs to move with speed in implementing recovery and growth strategies that have put in place. He further commits to work hard to ensure that the Department focus it's attention on the six industries that Stats S.A has highlighted as engulfed by a challenge of decline so as to boost the economy of KwaZulu Natal.

 

Issued by KZN MEC for EDTEA Siboniso Duma

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