South Africa’s economy in recession

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SHAREDSouth Africa’s economy in recession

Vumani Mkhize

BBC Africa Business

South Africa’s economy is in recession for the first time since 2009 following two consecutive quarters of negative GDP growth.

So it seems that Ramaphoria – the positive wave brought by President Cyril Ramaphosa’s ascension to power in February – appears to be officially over.

The news has come as a surprise to many analysts as they expected the economy to narrowly avoid a second quarter of decline.

The second largest economy in Africa is reeling: rising fuel prices, increased cost of living and an unemployment rate close to 30% is a stark indicator of how much work President Ramaphosa will have to do to rescue the country from a cliff edge.

Graph showing growth rates

StatsSA

Statistics South Africa said the economy contracted at an annualised rate of 0.7% in the second quarter, and this follows a 2.6% negative growth in the previous three months.

The biggest contributor to South Africa’s recession has been a massive 29% decline in agricultural output.

Graph showing growth rates of different sectors

StatsSA

The president told parliament last month that his cabinet was working on a stimulus package for the economy; and South Africa is seeking $100bn (£78bn) investments from international investors.

Statistics South Africa had said in 2017 that the economy was in recession, but its figures have since been revised.

Source : BBC

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