SA slips into technical recession after 1.4% GDP contraction in 4th quarter
This is the third time the country slipped into a technicial recession since 2009.
JOHANNESBURG – South Africa’s gross domestic product (GDP) has expectedly contracted by 1.4% in the fourth quarter of 2019, pushing the country into a technical recession, Statistics SA announced on Tuesday.
This is the second consecutive drop after the economy failed to show any signs of positive growth in the quarter before, making it a technical recession. A full recession refers to two quarters of recession, combined with a year-on-year decline GDP.
“The economy is doing extremely badly and with three out of the four quarters of last year having recorded negative growth, it suggested South Africans are getting poorer and poorer at an accelerated pace,” said economist Azar Jammine.
Stats SA said agriculture, forestry, and fishing were surprisingly the biggest contributors to the decline in GDP dropping by 7.6%. The drop was attributed to the fall in the production of field crops.
Construction and trade were also the biggest losers decreasing by 5.9% and 3.8% respectively.
There was decreased economic activity in wholesale, motor trade, and accommodation industries that usually boom in the fourth quarter.
In contrast, finance, real estate, and business services grew by 2.7% and mining and quarrying also expanded by 1.8% despite mass retrenchments in the industry.