December 3, 2021

Revised GDP data for South Africa adds R550 billion to estimates

Statistics South Africa (Stats SA) has revealed up to date estimates of gross home product (GDP) in South Africa, following a complete rebasing of the data.

The stats physique mentioned that is in step with worldwide finest practices to periodically assessment and replace the estimates of the scale, construction and efficiency of the economic system.

Throughout this course of, Stats SA included new sources of knowledge, improved the compilation methodology, reviewed and refined the classification of financial actions, and up to date the reference yr.

The brand new base yr for the nationwide accounts is 2015 – in different phrases, actual GDP is now measured at fixed 2015 costs as a substitute of 2010 costs as was beforehand the case.

Consequently, the revised estimate of GDP in 2020 is now R5.52 billion, a rise of 11% in contrast with the earlier estimate of R4.973 billion – an addition of R548 billion in estimated output. The annual progress charge for 2020 was revised from -7.0% to -6.4%.

Why the change?

Stats SA mentioned that as a result of costs and financial buildings change over time, the bottom yr for the nationwide accounts wants to be up to date. Additional, GDP estimates have to be benchmarked utilizing the newest out there socio-economic surveys, a few of that are solely carried out at intervals of a number of years.

“Rebasing and benchmarking, along with the introduction of new sources and methods, are essential activities for maintaining GDP as a reliable measure of economic performance,” it mentioned.

The adjustments are additionally vital due to important shifts within the economic system and the reclassification of sure sectors.

For instance, worth added to the economic system by the finance, actual property and enterprise companies sector has elevated tremendously between 2010 and 2015, and plenty of companies that beforehand fell below basic authorities companies at the moment are including worth within the private companies sector.

“The steep fall in general government and the sharp rise in personal services are closely linked,” Stats SA mentioned. “Education and health activities that were previously classified under government have been reclassified under personal services, as a result of an adjustment in methodology.”

“Education now includes new estimates for private education – based on household final consumption expenditure. Sewage and refuse disposable and sanitation now includes local trading entities.”

Leisure, cultural and sporting actions now embody municipal sport, recreation and environmental safety actions, all derived from Stats SA’s Quarterly Monetary Statistics of Municipalities. There was an enchancment in methodology for estimates of the casual sector and unlawful actions, it mentioned.

Largest adjustments

Except for GDP estimates for 2020 rising by virtually R550 billion due to the revision, the make-up of South Africa’s economic system has additionally shifted.

Finance, actual property and companies companies are nonetheless the biggest creator of worth within the economic system however have grown considerably. Authorities companies, which used to be the second-largest contributor, at the moment are sixth on the checklist.

Together with authorities companies, the contribution from mining and quarrying, electrical energy, gasoline and water, and transport, storage and communication sectors have all declined.

The revised data will even affect quarterly reporting, reframing the financial recession skilled over the previous couple of years.

For instance, based mostly on earlier estimates, South Africa skilled three quarters of financial decline earlier than the large hit to the economic system by the Covid-19 pandemic and nationwide lockdowns. Nonetheless, with the brand new revisions, South Africa recorded 1 / 4 of financial progress in This autumn 2020, earlier than the affect of the pandemic.

Stats SA mentioned that the group will publish the revised quarterly GDP data from Q1 2021 and projections for Q2 in September. As beforehand introduced, quarterly data will not be annualised.

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