Analysts say while a technical recession was expected the contraction is far bigger than previously anticipated.
Household spending increased by 1,4% in Q4:2019. Spending on clothing & footwear was up by 8,5%. Spending on furnishings and household equipment climbed by 3,6%.
Listen here for more: https://t.co/CGvIzIDVmo#StatsSA #GDP #economy pic.twitter.com/Su4TyxOuJe
— Stats SA (@StatsSA) March 3, 2020
This comes as figures released by Statistics South Africa show that the country’s economy shrank by 1.4% in the fourth quarter of 2019 – following a contraction of 0.8% in the third quarter of 2019.
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South Africa’s economy slipped into its 3rd #recession since 1994 in Q4:2019, shrinking by 1,4%. This followed a contraction of 0,8% in Q3. #StatsSA #GDP #economy pic.twitter.com/BZDlddovOp— Stats SA (@StatsSA) March 3, 2020
A recession is defined as two consecutive quarters of negative economic growth in a year.
Chief Economist at Econometrix, Dr Azar Jammine says the likelihood of further credit rating downgrades is now higher.
In the video below, South African Institute of Race Relations Economist Ian Cruickshanks says the technical recession is a serious setback:
An Economist at Nedbank, Johannes Khoza says South Africa’s recessionary environment will further hamper efforts to create jobs.
The South African economy only grew by 0.2% for the whole of 2019.
The number of civil servants employed decreased across all levels of government, with the exception of municipalities. This dragged government activity down by 0,4%.
Listen here for more: https://t.co/CGvIzIDVmo#StatsSA #GDP #economy pic.twitter.com/HmTNLK1Lz4
— Stats SA (@StatsSA) March 3, 2020
It is expected that growth will remain constrained this year as challenges in electricity supply persist coupled by the impact of the coronavirus on trade.
Ramaphosa not surprised by recession
President Cyril Ramaphosa says the recession comes as no surprise given the country’s numerous economic challenges. He says Eskom’s electricity supply issues presented the biggest stumbling block for the economy.
Ramaphosa’s comments come on the back of figures released by Statistics South Africa which revealed that the country has fallen into a technical recession.
Stats SA figures have revealed that the Gross Domestic Product (GDP) decreased by 1.4% in the fourth quarter of 2019, following a contraction of 0.8% in the third quarter of 2019.
Video | President Ramaphosa share s his thought following announcement that the country is in recession:
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