SA already in recession?
An economist says there are several factors pointing to South Africa already being in recession.
JOHANNESBURG - Economist Dawie Roodt says South Africa could already be in a recession due to its failing currency, low employment rate and political infighting.
The rand tumbled to a seven-week low following the announcement that asset management company Futuregrowth suspended loans to six state-owned enterprises.
Roodt says it depends on how one defines a recession.
"In my books, an economy that grows below its population growth, has increasing levels of unemployment and poverty points to recession. If that is the case then we have been in recession for quite some time."
LISTEN: Economist Dawie Roodt on the Gordhan saga and SA economy
Government bonds were also firmer, with the yield on the benchmark 2026 paper down 4 basis points to 9.005 percent.
On the bourse, the benchmark Top-40 index dropped 0.2% at 46,168 points while the All-Share index dipped 0.19% to 52,631 points as investors fretted over the brewing political storm.
"The markets are a bit worried that South Africa will be downgraded and that has been reflected in the banking stocks," said director at Sanlam Private Wealth, Greg Katzenellenbogen.
Standard Bank fell 2.19% to R130.23, RMB Holdings dropped 2% to R58 rand, Nedbank weakened 1% to R204 and FirstRand lost 1% to R43.
Additional reporting by Reuters.