05 Sep South Africa falls into recession for first time in nine years
South Africa has slipped into a recession for the first time since 2009 after economic growth unexpectedly slowed during the second quarter of 2018.
In its most recent quarterly report, Statistics South Africa revealed that GDP fell by 0.7% from April to June, compared with expectations for 0.6% GDP growth.
The contraction was predominantly driven by an 11% decline in South Africa’s agriculture sector, after a major drought affected parts of the Western Cape earlier this year, while the trade and transport sectors also suffered output declines.
The news is a blow to President Cyril Ramaphosa, who pledged to turnaround South Africa’s ailing economy and woo foreign investors after succeeding Jacob Zuma in February this year.
South Africa’s rand also fell against the dollar in the wake of the announcement, extending a steep fall from the previous session. The currency fell by as much as 2.6% to 15.2268 against the dollar.