Published: Tue, June 06, 2017
Money | By Armando Alvarado

South Africa slides into recession as economy contracts

South Africa slides into recession as economy contracts

South Africa's economy fell into a recession for the first time since 2009 after it contracted for a second straight quarter in the first three months of the year.

The rand lost 1,1% to R12,85/US$ by 11.42am.

"For the first quarter, the headline GDP is estimated at a contraction of -0.7% - that is the quarter on quarter seasonally adjusted and annualised growth rate".

The high growth sectors of our economy - such as manufacturing and tourism - ought to be stimulated with an array of policy interventions to facilitate growth.

"It is the ANC that has led us to this point of economic collapse, where we have a "junk" economy in recession, and where 9.3 million South Africans are without work - the highest unemployment rate in over 14 years".

No need to cancel Trump's visit to UK- Johnson
On Monday, a spokesman for Khan responded to the latest statement from Trump, saying, "Nothing has changed since yesterday". Attacks at the London Bridge and Borough Market kill seven and injure nearly 50.

He said what is particularly concerning is that the figure for so-called broad definition unemployment had risen from 35.6% in the last quarter of 2016 to 36.4% in the first quarter of this year.

South Africa has entered recession for the first time in eight years, data from Statistics South Africa showed on Tuesday, after the economy contracted in the first quarter, led by weak manufacturing and trade.

Moody's Investors Service, which rates the nation at two levels above junk, has the nation on review for a downgrade. "From a government perspective, this is likely to put further pressure on revenue collections, which are much-needed funds that are crucial to investing in growth enhancing projects", said Tumisho Grater, an economic strategist at Novare Actuaries and Consultants.

Meanwhile, South Africa's currency has extended its losses against the United States dollar to more than one percent as the country's sovereign debt also weakened on Tuesday. South Africans went out to protest. Ratcheting up more debt is not the answer because sooner or later it will catch up with you. "It is better to tighten belts now and adjust your lifestyle to suit your income however unpleasant that may be in the short term", he said.

Like this: