A recent publication by Statistics South Africa (Stats SA) pronounced that the South African economy shrank by 0.7 percent into recession.
Stats SA pointed out that the decrease of 0.7% in GDP during the first quarter of 2017, and, a 0.3% contraction in the fourth quarter of 2016 contributed to the present economic status of the country.
According to Stats SA, the acceptable measure was used in determining the nation’s economic status. The measure it said, is two or more consecutive quarters of negative growth (real GDP quarter-on-quarter).
Stats SA specified that both the secondary and tertiary sectors recorded negative growth rates in the first quarter of 2017. Adding that the trade and manufacturing industries were the major sector that suppressed production, Stats SA disclosed that trade fell by 5.9 percent and manufacturing, 3.7 percent.
Agriculture and mining industries made positive contributions to growth in the quarter. Nonetheless, their contributions weren’t enough to help avoid recession.
Stats SA buttressed that trade experienced production falls across the board. This was obvious in catering and accommodation and wholesale trade.
Similarly, manufacturing was crippled by lower production levels in seven of its ten divisions. It decline was most notable in petroleum and chemical products which accounted for over 20 percent of the manufacturing industry.
This wasn’t helpful in anyway as it was the third consecutive quarter of decline in the manufacturing sector.
Sadly, the tertiary sector decided to join the declining trend at the wrongest time. The sector made up of the finance, transport, trade, government and personal services experienced its first quarter of decline since the second quarter of 2009.
Any Consolation For The South African Economy?
Well, South Africans can find some comfort in the growth experienced in agriculture.
For the first time since the fourth quarter of 2014, the sector experienced growth. In Stats SA words, “a jump in production in field crops and horticultural products lifted the industry in the first quarter.
“This might be one of the first signs of recovery from one of the toughest droughts in recent history.”
Likewise, growth was recorded in the mining sector. The growth was enabled by increase in the production of gold and other metal ores.