Rand extends losses after GDP data

GDP data released on Tuesday morning shows that the country has entered into a technical recession.

Picture: Pixabay.com.

JOHANNESBURG - The rand has extended its losses to nearly 1% following GDP data showing that the country has entered into a technical recession.

StatsSA says first quarter GDP contracted by 0.7% after contracting by 0.3% in the last quarter of 2016.

Just after 12:30pm the rand was trading at 12.87 to the dollar, 16.60 to the pound and 14.47 to the euro.

Despite mining and agriculture showing improvement, a number of other areas have seen weak growth or even contraction.

"The secondary and tertiary sectors - there the constituents would be retail trade, manufacturing activity, electricity production and construction - almost all of those particular sectors of the economy were either flat or in severe contraction," says Standard Bank chief economic Goolam Ballim.

He says this simply shows that the economy is weak.

"And even though we would cheer the positive performance of the mining and agricultural sectors, overall the quality of growth in South Africa is also pitiful."

South Africa last entered into a technical recession in 2009.