S.Africa economy shrinks for first time since ‘Great Recession’
South Africa's economy shrank in the first quarter of the year, in the worst performance recorded since the global recession five years ago, official data showed Tuesday.
Statistics South Africa reported the economy contracted by 0.6 percent, a stunning reversal for Africa’s most advanced economy amid a rapid boom elsewhere in the continent.
The worse-than-expected data comes during the first full day on the job for South African finance minister Nhlanhla Nene.
The 55-year-old was sworn in as South Africa’s first black finance minister on Monday.
The contraction was blamed on a slump in mining activity due to a platinum strike now in its fifth month and a significant drop in manufacturing.
“This makes for grim reading,” said Razia Khan, Africa’s regional head of research for Standard Chartered Bank.
“Mining, hit by protracted industrial unrest, fell almost 25 percent on an annualised basis.”
“Manufacturing was down 4.4 percent.”
Shortly after the news the rand fell almost one percent against the dollar, which was much worse than economists had predicted.
In the last quarter of 2013 the economy grew 3.8 percent.