The economy of the 16-member Southern African Development Community (SADC) contracted by 4.8 percent in 2020 on the back of coronavirus-induced recession, according to a report published by the regional bloc on Monday.
The report, titled Regional Economic Performance and the Business Environment in 2020 and Medium-Term Prospects, said recent data indicates SADC regional gross domestic product (GDP) growth contracted by 4.8 percent in 2020, down from a growth of 2.1 percent in 2019.
“All member States recorded contractions in real GDP growth in 2020, except for Malawi and the United Republic of Tanzania who recorded growth rates not exceeding 5 percent,” the report said.
It said preliminary data provided by member states in April 2021 and from the International Monetary Fund’s World Economic Outlook database, also of April 2021, “shows that the COVID-19 pandemic triggered an economic recession more severe in tourism and commodity exports driven economies as well as in economies with limited policy space to respond.”
Annual regional inflation increased to an average 49.6 per cent in 2020 from 16.6 per cent in 2019, largely due to heightened inflationary pressures in Zimbabwe, the bloc said.
“The average inflation, excluding Zimbabwe, averaged 6.4 per cent in 2020.
“All member states, except Angola, DRC (Democratic Republic of Congo), Malawi, Zambia and Zimbabwe, met the regional inflation target of 3-7 percent range,” it said.
Annual inflation rate in the SADC region is projected to ease a bit to 15.4 per cent in 2021, with Zimbabwe’s inflation expected to decelerate significantly to 134.8 per cent from 654.9 percent in 2020.
The report said member states that achieved single-digit average inflation benefited from the weak commodity prices, especially oil prices which are a major determinant of prices in the region.
SADC reported that the regional fiscal deficit average widened in 2020, largely due to an increase in government expenditures by governments to curtail the spread of COVID-19.
The region’s largest economy, South Africa, was Africa’s worst-hit country, with more than 2.3 million COVID-19 cases and nearly 70,000 fatalities since March 2020.