News ID: 266493
Published: 0706 GMT March 04, 2020

South Africa in recession after shock economic slump

South Africa in recession after shock economic slump
BLOOMBERG

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

This followed a contraction of 0.8 percent in the third quarter, which means that the economy was in recession for the last half of 2019, fin24.com reported.

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 percent (in real terms). In 2018, it saw growth of only 0.8 percent.

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 percent) taking the biggest hit.

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

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

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.


 

   
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