Finance

South Africa slides into recession as economy contracts

By Hassan Isilow

JOHANNESBURG

South African economy has slipped into a recession after its Gross Domestic Product (GDP) decreased by 0.7 percent during the first quarter of 2017, a government body announced Tuesday.

“In the first quarter of 2017, both the secondary and tertiary sectors recorded negative growth rates,” Statistics South Africa said in its report released in the capital Pretoria.

It said trade and manufacturing industries were the major heavyweights that stifled production, with trade falling by 5.9 percent and manufacturing by 3.7 percent.

However, the agriculture and mining industries both contributed positively to growth in the first quarter, but not enough to avoid the recession, it said.

The South African rand weakened shortly after the announcement, losing 1.1 percent to the greenback by 11:45 local time (10:40 GMT).

South Africa has been struggling to address its slow economic growth, but experts say political uncertainty such as sacking of respected Finance Minister Pravin Gordhan led to tumbling of markets.

According to Statistics South Africa, the country has experienced eight economic recessions since 1961, with the longest occurring in 1991–1992, due to a global economic downturn.

Africa’s most industrialized economy also witnessed a recession in 2008–2009 when the country caught up in the global financial crisis.


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