SOUTH AFRICA IN FIRST RECESSION SINCE 2009

For the first time since 2009, South Africa entered recession in the second quarter of the year, data showed yesterday, in a stinging blow to President Cyril Ramaphosa’s efforts to revive the economy after a decade of stagnation.

Reuters quoted reports from South Africa to have revealed that the economy contracted by 0.7 per cent quarter-on-quarter, led by declines in the agricultural, transport and retail sectors.

Continuing, the Reuters report stated that the Rand stretched losses against the dollar to more than two per cent and government bonds fell after the data was released.

However, analysts had predicted that the economy would grow 0.6 per cent in the latest quarter. “We are in a recession. We reported a contraction in the first quarter and now in the second quarter with a fall of 0.7 per cent,” South Africa’s Statistician-General, Risenga Maluleke, said.

The report also stated that Africa’s most developed economy needs faster economic growth if it is to reduce high unemployment – currently at 27 per cent – and alleviate poverty and inequality that stokes instability.

It added that unemployment was a hot-button issue ahead of national elections in 2019, and the African National Congress (ANC) has made repeated pledges that things would improve.

The report revealed that the country’s agricultural output fell 29.2 per cent in the second quarter, while the transport, communication and storage sector shrank 4.9 per cent, “mining output grew by 4.9 per cent and finance by 1.9 per cent.”

Statistics said the economic contraction in the first quarter was steeper than initially recorded at 2.6 per cent and that gross fixed capital formation fell by 0.5 per cent in the second quarter.

(ThisDay)