ECONOMY FALLS 2.9% IN 2ND QUARTER

MBABANE – The country’s Gross Domestic Product (GDP) for the second quarter of 2020 shrank by a notable 2.9 per cent, mainly as a result of the COVID-19 lockdown coming into effect during that period.

This follows back-to-back declines of 2.4 and 1.2 per cent in the previous two quarters.  This is as per figures from the Ministry of Economic Planning and development which were released yesterday. The  year-on-year  (Y-Y)  seasonally  adjusted 2020  quarter two  showed a massive  decline  of  8.2 per cent  as compared  to  a  growth  of  5.8 per cent in  the  previous  year  2019 (Q2). 

growth

The quarter to quarter (Q-Q) seasonally adjusted growth which measures the rate of change from subsequent quarters showed the drop of 2.9 per cent in 2020. 

the primary sector which on average contributes about  nine per cent of the total economy (GDP) showed  a decline of two per cent  in 2020 quarter two year-on-year. The realised decline was due to a decrease in animal production, forestry and mining.  The secondary sector which contributes about 35 per cent to the economy indicated a decline of 24.5 per cent during the period under review.  The decline in this sector was due to a decrease in manufacturing, electricity, water and sewage and construction.

 The  tertiary  sector, which contributes  about  51 per cent of the  entire economic activities showed an overall decline of 1.2 per cent,  during the second quarter of this year.  This decline was due to a decrease in industries  that include wholesale and retail trade, transportation and storage, accommodation and food service activities, professional,    scientific    and    technical    activities and arts, entertainment and recreation.

Meanwhile, the quarterly National Accounts (QNA) series estimates have been compiled using the  production  approach  starting  from  2013  quarter one  to  2020  quarter two.  

considerable

The quarterly time series are often characterised by considerable seasonal variations which might complicate inter-period comparability. Therefore, the GDP estimates are seasonally adjusted to make it possible to conduct an analysis of the underlying change of economic activity between periods. 

The back series quarterly estimates have been benchmarked to the 2019Annual estimates released in September 2020.

Benchmarking technique help improve the quality  of  QNA  series,  by  making  them  consistent  with Annual National Accounts (ANA)benchmarks  and  coherent  with  the  short-term evolution  of  quarterly economic  indicators.   However, the accuracy of QNA data ultimately depends on the accuracy of the annual benchmarks and quarterly indicators. 

Some economists felt the next quarter’s figures could be even worse, with fears that that the country could plunge into deep recession.

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