Business

SA in first recession since 2009

2018-09-04 15:36

South Africa has officially been plunged into a technical recession, according to figures released by Statistics South Africa on Tuesday.

The economy contracted by 0.7% in the second quarter of this year, following on from a 2.6 % contraction in the first quarter of 2018, leading to a technical recession, Stats SA confirmed on Tuesday.

“We are in recession. We reported a contraction in the first quarter even with revisions and now in the second quarter with a fall of 0.7%, we are in recession,” Statistician-General Risenga Maluleke said in Pretoria on Tuesday.

This is South Africa’s first recession since the 2008/09 global financial crisis.

The primary sector has been the hardest hit, which includes agriculture, trade, transport and government. Widespread droughts throughout the country have hit the agricultural sector, resulting in a mammoth 29.2% decline in the second quarter.

This was followed by the transport industry with a 4.9% decline and the trade industry with a 1.9% decline.

The mining sector, however, saw an increase in production and was up 4.9%.

Consumer spending habits have also been adjusted for the first time since 2016, which saw a drop in spending by 1.3%, with Stats SA saying that this matched a decline in the sale of the retail and motor industry sectors for the same period.

Electricity consumption, however, increased by 2.1%, despite a 5.23% increase for direct Eskom customers which was approved by The National Energy Regulator of South Africa earlier this year.

Exports grew substantially by 13.7% in the second quarter, with a rise in the exports of pearls, precious and semi-precious stones as well as vegetable products.


Avantika Seeth
Multimedia journalist
City Press
p:+27 11 713 9001
w:www.citypress.co.za  e: avantika.seeth@citypress.co.za
      
 
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November 18 2018