South Africa on Tuesday entered into recession for the first time since 2009, according to second quarter data. That means the country has for two successive quarters recorded economic decline with a fall in Gross Domestic Product (GDP).
By entering into recession, it means South Africa’s trade and industrial activities reduced in two successive quarters.
Statistics South Africa released economic figure on Tuesday detailing how the economy contracted by 0.7 percent in the second quarter.
There were declines in the agricultural, transport and retail sectors, according to the latest figures.
The country’s currency the rand also recorded significant losses against the dollar to more than 2 percent. Government bonds fell as well.
South Africa’s Statistician-General Risenga Maluleke says “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 percent.”
The South African #economy slipped into a #Recession as economic activity declined by 0,7% in Q2:2018 q/q after a 2,6% decline in Q1:2018 #StatsSA #GDP https://t.co/KjOdmHB0yN pic.twitter.com/aBnPccETmP
— Stats SA (@StatsSA) September 4, 2018
A senior economist at BNP Paribas Jeffrey Schultz is quoted by Reuters as saying “There is no way to sugar coat the numbers.
The growth picture in the first half of 2018 is ugly and it shows in this economy that there is broad based weakness across the primary and tertiary sectors of the economy.”
This could be seen as a big blow to President Cyril Ramaphosa who is hoping to revive the economy after a decade of stagnation.