SA in "technical recession" due to second quarter contraction

South Africa Enters Technical Recession

Cyril Ramaphosa has a recession on his hands

Latest data released on Tuesday by the South African authorities' shows President Ramaphosa's six-month-old government posting a negative start like his immediate predecessor, Jacob Zuma. "This type of environment is hard for job creation".

Citadel Chief Economist Maarten Ackerman said that although the technical recession of two consecutive quarters of contraction heightened South Africa's risk of suffering yet another credit downgrade in the second half of the year, he expected an upside surprise in the second half. The EFF has long interpreted the economy not based on media euphoria but concrete legislative proposals which will lead South Africa out of permanent state of recession.

On the JSE, Naspers's negative patch continues, dropping 0.67 percent to R3,183.61, though Chinese internet company Tencent, of which Naspers owns about a third, was up almost 2 percent in Hong Kong trade. Africa's second largest economy and most-industrialized economy shrank an annualized 0.7 percent in the second quarter, an outcome that was far worse than any forecaster had anticipated.

Founder of militant Haqqani network dies in Afghanistan, Taliban says
In 2005, Haqqani refused a position in government from Afghan President Hamid Karzai, whom Haqqani sought to kill. After the militant group's fall in 2001, he moved to the tribal areas along the Afghanistan-Pakistan border.

This is due to a drop in the production of field crops and horticultural products, and the impact of drought.

The trade, catering and accommodation industry decreased by 1.9 percent and contributed -0.3 of a percentage point. Mining output grew by 4.9 percent and finance by 1.9 percent, however, Reuters reported. Manufacturing activity fell by 0,3%, driven by a fall in the production of electrical machinery, transport equipment (including motor vehicles), and products within the furniture and "other" manufacturing division. The construction industry increased by 2.3 percent. Exports of goods and services were up 13.7%, largely influenced by increased trade in precious metals, mineral products and vegetable products.

The rand weakened to R15.34 to the USA dollar, and by 15:34 it was trading down 3.06% at R15.31 in Johannesburg. "Furthermore, a low GDP growth remains a sovereign credit rating weakness and this together with the ongoing populist direction of some of SA's actual and proposed economic policies continue to damage investor sentiment and therefore economic growth", says Lara Hodes at Investec.

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