Recession: Concerns some sectors entering negative territory
GDP narrowed by 0.7% in the first quarter of 2017, compared to a contraction of 0.3% in the last quarter of 2016.
JOHANNESBURG - While there has been growth in mining and agriculture, there are concerns that a number of other sectors have contracted with some entering into negative territory.
Stats SA has released the latest GDP figures, showing that the country has entered a technical recession with growth contracting in two consecutive quarters.
GDP narrowed by 0.7% in the first quarter of 2017 compared to a contraction of 0.3% in the last quarter of 2016.
A Reuters poll of economists had predicted quarter-on-quarter growth of 0.9% for the first quarter.
But Standard Bank chief economist Goolam Ballim says a number of factors including political tensions have taken their toll.
“We have an economy that is in recession, and an economy that is suspended until a clearer perspective on the political cycle that will emerge in December.”
Retail trade sales were down almost 6%, while construction was down 1.3%.
However, despite the country entering into a technical recession, a few sectors managed to show positive signs.
First quarter agricultural growth was up 22.2%, which has been welcomed after years of drought.