S.Africa economy contracts at sharpest rate in nine years
South Africa's economy suffered its sharpest contraction in nearly a decade in the first quarter of 2018, official data showed on Tuesday, highlighting the huge challenge facing President Cyril Ramaphosa as he tries to get the economy back on its feet.
Gross domestic product (GDP) contracted by 2.2 percent in the period from January to March, compared with the preceding three months, the statistics authority Stats SA calculated.
“After growing by 3.1 percent in the fourth quarter of 2017, the South African economy wobbled in the first quarter of 2018, shrinking by 2.2 percent,” it said in a statement.
It was the sharpest contraction since the first quarter of 2009, when South Africa’s economy shrank by 6.1 percent.
Almost all sectors suffered a decline, with the agricultural sector performing particularly badly and contracting by 24.2 percent in the January-March period, also the sharpest quarter-on-quarter dip since 2009, the statisticians said.
The mining sector even “entered into recession with its second consecutive quarter of economic decline,” according to Stats SA.
Lower gold and platinum production, as well as challenges in iron ore manufacture all contributed to a 9.9-percent dip in the sector in the first quarter.
The economic picture was not all bleak, however, and modest improvements were seen in the insurance, transport and property sectors.
South Africa has suffered several years of sluggish growth and a stubbornly high unemployment rate, currently at 27.7 percent.
President Ramaphosa has made fixing the economy the centrepiece of his political pitch to voters. Avoiding a credit rating downgrade is also a government priority.