SA in recession after shock economic slump
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 yesterday.
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. South Africa last entered a recession — when the GDP fell 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. – News24