DURBAN – eThekwini Municipality announced today that Durban’s Gross Domestic Product (GDP) growth forecast for 2021 is 4.5%, the highest recorded forecast in 13 years.
In a statement today, the city said the sectors contributing to almost 73% of this growth are manufacturing, finance and business, and trade.
“The city has experienced notable growth after the lifting of the first lockdown with economic activity beginning to normalise.”
It said according to recently published IHS figures, Durban’s economy is estimated to expand at 4.5% in 2021. The city’s economy grew at 0.5% from January to March 2021 and further grew at 1.1% from April to June 2021.
StatsSA recently recorded a national growth rate of 1.2% in GDP from April to June 2021, and 1% from January to March 2021, said the city.
“During this same time, national business confidence rose to its highest level in 13 quarters (since 2018). Although the positive performance was experienced before the civil unrest in July, it reflects the resilience in economic activity including a global commodity boom which lifted national growth ensuring growth rates in the agricultural and mining (due to exports in precious metals) sectors,” said the city.
In addition, it said almost 80% of SA’s positive growth in the second quarter was contributed by the Transport, Personal Services and Trade Industries sectors with 34%, 26% and 18% growth respectively.
“This together with growth over quarter 3 and 4 of 2020 and quarter 1 of 2021 has resulted in tax revenue amounting to R377 billion for the period from April to June 2021, an increase of 56.2% on the previous year.”
Following this, the city said, the National Treasury recorded a primary budget surplus for the first time in three years. This means more was collected in revenue than what was spent by the government nationally.
South Africa was also recorded as having the best performing emerging market currency, assisted by current account surpluses and the global commodity boom, said the city.
It said the International Monetary Fund (IMF) revised South Africa’s economic growth forecast up to 5%, attributing this primarily to the increase in commodity prices.
“It must be noted, however, that although the forecast is positive, it is off a low base and an increase of 4.5% still leaves the city’s GDP at below 2019 levels and that the trend would not be carried into 2022,” it said.
“The economy would need 3.1% economic growth for at least another year or an expansion of the economy by another R13.4bn in 2022 to return the economy to 2019 (i.e. pre-Covid-19) levels. This would require substantial additional investment expenditure or positive external shocks such as a continued increase in commodity prices,” said the city.
Nevertheless, the city said this was a positive trend that brought significant hope to an otherwise beleaguered economy.
THE MERCURY