04 Mar South Africa slips into recession again after GDP contraction in Q4
South Africa has fallen into another recession after its economy shrank by 1.4% in the final quarter of 2019, according to latest GDP figures released by Statistics SA on Tuesday.
The Q4 contraction followed a 0.8% decline in GDP in the third quarter of last year, meaning that South Africa entered its second recession in consecutive years. The country’s economy also retracted in successive quarters in the first half of 2018.
For the whole of 2019, Africa’s second largest economy grew by just 0.2% in real terms. In the previous year GDP growth was slightly better at 0.8%.
The economy’s 1.4% decline in Q4 was worse than economists had expected, with seven out of 10 industries contracting in the quarter as state-run power firm Eskom’s load-shedding policy squeezed multiple sectors.
Agriculture took the biggest hit, contracting by 7.6%, while manufacturing shrank by 1.8% in the fourth quarter and the transport, storage and communication industry saw a decline of 7.2%.
Not long after news of the recession broke, President Cyril Ramaphosa said: “The recession underlines the urgent need for us as a country to embark and continue on the measures that we announced in the State of the Nation Address and we cannot sit back and not do what needs to be done.
“We will need to sharpen our focus and concentrate our efforts on the reforms that we need to embark on and also implement the initiatives that we announced.”