ZCZC
BCN-29
SAFRICA-ECONOMY-POLITICS
S.Africa slips into recession, against forecasts
JOHANNESBURG, Sept 5, 2018 (BSS/AFP) – South Africa’s economy tipped into
recession as it shrunk 0.7 percent in the second quarter, official data
showed Tuesday, dealing a blow to President Cyril Ramaphosa who came to
office in February.
The downturn, which was the second consecutive quarter of negative growth,
was driven by contractions in agriculture, transport, trade and manufacturing
industries.
StatsSA said agriculture was hit by a fall in field crops, drought in the
Western Cape and severe hailstorms in Mpumalanga province that damaged
production.
After a revised 2.6 percent contraction in the first quarter, the latest
data piled pressure on Ramaphosa who has promised a “new dawn” after his
predecessor Jacob Zuma’s scandal-tainted nine-year reign.
Micheal Power, an asset manager at Investec, said domestic and
international events had combined to stall economic growth.
“We are getting no help from the outside with the strengthening dollar,
the escalating trade war and issues that are now facing emerging markets,” he
told AFP.
“In some respects, this can be seen as a good thing if it means that we
are now not drinking to avoid the hangover.”
The recession is the first in South Africa since the 2008-2009 global
financial crisis, when South Africa experienced three consecutive quarters of
economic decline.
Before Tuesday’s data, Bloomberg said only one of 12 economists surveyed
had predicted a contraction.
Independent analyst Daniel Silke said on Twitter that the figures
reflected an “inability to create confidence-building measures to enhance
work opportunities and uplift investor sentiment.”
Ramaphosa, who faces elections in 2019, has been on an investment drive to
attract foreign investment and tackle unemployment of about 28 percent.
BSS/AFP/HR/1030