Finally, S/Africa joins Nigeria in recession as economy shrinks 0.7% in Q1
At a time the Nigeria economy is looking set to exit the arena of recession, South Africa’s economy contracted in the first quarter of this year, pushing the continent’s largest economy into its first recession since 2009, the official statistics agency reported on Tuesday.
The South Africa Statistical Agency report said in beats that “The South African economy moved into recession with the reported decrease of 0.7 percent in GDP (gross domestic product) during the first quarter of 2017, following a 0.3 percent contraction in the fourth quarter of 2016”.
It revealed further that the biggest contributor to the negative GDP growth were the trade, catering and accommodation industry, which shrank by 5.9 percent and accounted for -0.8 of a percentage point to GDP growth.
The manufacturing sector decreased by 3.7 percent as unemployment climbed to a record 27.7 percent, the highest joblessessness rate in 14 years.
Only the mining and agriculture sectors posted growth rates of 12.8 percent and 22.2 percent respectively in the first quarter.
South Africa’s economy has been experiencing weak growth in recent years.
Business Hilights recalls that the country had in April lost its investment grade when the world’s two major rating agencies Fitch and Standard & Poor’s downgraded its sovereign debt to junk status after President Jacob Zuma’s dramatic ministerial shake-up that saw respected finance minister Pravin Gordhan axed.
The two ratings firms cited political and economic instability as grounds for the downgrades
