Is SA headed for a recession this year?

Statistics South Africa says manufacturing output in November was down by 1 percent year on year.

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JOHANNESBURG - Statistics South Africa says manufacturing output in November was down by one percent year-on-year in volume terms, lending more weight to claims the country could be headed for a recession.

The agency says this one percent fall comes after manufacturing output contracted by 2.1 percent in October.

On a month on month basis, factory production was down 1.2 percent, but was up 0.9 percent in the three months to November compared with the previous three months.

The figures follow the rapid decline in the value of the rand.

Nedbank Capital's Mohammed Nalla says it appears the economy is slowing.

"There is a distinct possibility that we will see a technical recession in South Africa between the second and third quarter of 2016. That means the pressure for consumers will continue unabated for much of this year."

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Furthermore, South Africans have been warned that the Reserve Bank may have to increase interest rates at the end of this month.

The rand dropped to an all-time low against the dollar on Sunday night reaching R17,99 cents after erratic trading on Asian markets.

It recovered the next morning and is now sitting at around R16,60 cents to the dollar.

Experts believe it will take some time for the rand to recover and say consumers will be hard hit this year.