South African economy suddenly falls into recession

by Staff writer

South Africa has fallen into recession for the first time in eight years after economic growth shrank by 0.7% between January and March.

The downturn, due to weak manufacturing and trade, follows a 0.3% fall in GDP in the final quarter last year.

It is the first time that economic has slowed for two consecutive quarters – the technical definition of a recession – since 2009.

The value of the rand fell by 1% on the currency markets.

All sectors of the economy apart from agriculture and mining also contracted in the quarter, while household spending fell 2.3 per cent, the statistics agency said.

Analysts had expected GDP to grow by 0.9% during the first quarter.

However, Joe de Beer, deputy director general of Statistics South Africa, said: “We can now pronounce that the economy is in recession.”

He added: “The major industries that contracted in the economy were the trade and manufacturing sectors.”

According to Financial Times, the report of the unexpected recession confounds economists.

Share this post with your friends:

Leave a Reply

Your email address will not be published.