GDP growth stats hide why South Africa’s capitalist economy fails us all
8 June 2021
Fake news today from StatsSA is that the first-quarter Gross Domestic Product recovery is recovering at a healthy 4.6% annualised growth rate. For those in Treasury and the Reserve Bank who like to brag, these seems impressive compared to 2020’s -7% GDP decline.
But in reality, the headline figure focuses only on a bogus variable, GDP, that – as a measure of “goods and services produced” – entirely ignores the country’s depreciating equipment (wear and tear on machines), women’s unpaid work, pollution damage and especially the depletion of our natural wealth that is stripped out as minerals and only counted as “income.”
So at the same time as the fake-economy rises, the amount of Gross Fixed Capital Formation in South Africa actually declined, StatsSA admits, “at a rate of 2,6%. The main contributor to the decrease was machinery and equipment.” (This translates to a “contribution to growth in GDP” of -0.4%).
In short, our productive capital is still shrinking and unemployment is at a record level, of at least 43.2% using the expanded definition.