SA economy not in recession, says Ramaphosa

ANC President Cyril Ramaphosa says South Africa has been able to overcome its economic challenges before, and this time would be no different.

FILE: President Cyril Ramaphosa. Picture: GCIS.

PIETERMARITZBURG – African National Congress (ANC) President Cyril Ramaphosa says South Africans should not be fearful that the economy is in a recession because this is not true.

Ramaphosa has been addressing professionals in Pietermaritzburg as a part of the ruling party’s “Thuma Mina” campaign.

This week it was announced that the country’s economy had slid into a technical recession after the gross domestic product (GDP) contracted by 0.7% in the second quarter.

Ramaphosa has told the professionals that the government intends to respond to the current state of the economy.

Ramaphosa says South Africa has been able to overcome its economic challenges before, and this time would be no different.

“We’re facing what people are saying is a technical recession, and it’s largely due to the performance of agriculture. Agriculture did not perform as highly as we’d thought, and some people are saying it’s largely because of the late rains and harvest.”

Ramaphosa says job creation and youth unemployment remain a top priority for the government.

“[And] I’m saying we should not be fearful and think that we’re in a recession... we’re not, this is going to be corrected. I have no doubt about it.”

The president says in the coming days the government will be giving an outline on how it plans to tackle the latest economic crisis.

WATCH: What the recession technically means

TECHNICAL RECESSION

The government has another mammoth task on its hands trying to dig the country out of yet another technical recession.

Stats South Africa revealed on Tuesday that GDP figures for the second quarter of the year showed a contraction of 0,7%.

To make matters worse, the figure for the first quarter has been revised to a contraction of 2,6%.

Economists say there are still several factors that the government is grappling with.

Xhanti Payi, an economist at Nascence Advisory, says the government still has a few areas it needs to concentrate on, including limiting expenditure.

Additional reporting by Ray White.

(Edited by Zamangwane Shange)