South Africa in recession following economic downturn

Last updated on September 11th, 2021 at 03:02 pm

The South African economy shrank by 1.4% in the fourth quarter of 2019, according to recent Gross Domestic Product numbers, released by Statistics SA on Tuesday March 3.

This followed a contraction of 0.8% in the third quarter, which means that the economy was in recession for the last half of 2019. South Africa last entered a recession – when the GDP falls for two consecutive quarters – in the second quarter of 2018. This is South Africa’s third recession since 1994.

The manufacturing industry shrank 1.8% in the fourth quarter, while the transport, storage and communication industry saw a decline of 7.2%.

For the whole of 2019, the South African economy grew by only 0.2% (in real terms). In 2018, it saw growth of only 0.8%.

The fourth-quarter decline is larger than economists had predicted, as the economy battles the fallout of load shedding.

Seven out of 10 industries contracted in the fourth quarter, with agriculture (-7.6%) taking the biggest hit.

The manufacturing industry shrank 1.8% in the fourth quarter, while the transport, storage and communication industry saw a decline of 7.2%.

Stats SA reports that household spending increased by 1.4% in the final quarter of 2019, but spending on clothing and footwear was up by 8.5%.

The weak growth is likely to add more presure to President Cyril Ramaphosa’s government and adminstration as the economy under severe scrutiny, under his leadership the economy continues to suffer, amid internal and external pressures