South African economy in recession after shock economic slump

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South African economy in recession after shock economic slump

The South African economy shrank by 1.4% in the fourth quarter of 2019, according to new Gross Domestic Product numbers, released by Statistics SA on Tuesday.

This followed a contraction of 0.8% in the third quarter, which means that the economy was in recession for the last half of 2019. South Africa last entered a recession – when the GDP falls for two consecutive quarters – in the second quarter of 2018. This is South Africa’s third recession since 1994.

For the whole of 2019, the South African economy grew by only 0.2% (in real terms). In 2018, it saw growth of only 0.8%.

The fourth-quarter decline is larger than economists had predicted, as the economy battles the fallout of load shedding.

Seven out of 10 industries contracted in the fourth quarter, with agriculture (-7.6%) taking the biggest hit.

The manufacturing industry shrank 1.8% in the fourth quarter, while the transport, storage and communication industry saw a decline of 7.2%.

Stats SA reports that household spending increased by 1.4% in the final quarter of 2019, but spending on clothing and footwear was up by 8.5%.

The weak growth is likely to add more woes to President Cyril Ramaphosa’s government, as the economy under his leadership continues to suffer, amid internal and external pressures.

 

Source: news24.com

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