SA GDP falls by 3.2%, biggest drop in 10 years

South Africa's economy shrank by 3.2% in the first three months of the year, Stats SA announced on Tuesday. 

"The 3.2% decline is the biggest quarterly fall in economic activity since the first quarter of 2009, when the economy – under strain from the global financial crisis – tumbled by 6.1%," said Stats SA in a note.  

The rand fell by over 1% against the dollar on the news, to trade at R14.64/$ at 12:24. 

While a decrease had been predicted by analysts and the SA Reserve Bank - who flagged depressed expenditure and investment in the economy, weak consumer demand, the negative impact of load shedding and recurring falls in mining production - the number still came as a shock. Investec's Annabel Bishop, for example, had predicted that real GDP was likely to fall by 1.9% in Q1. 

Almost all industries contracted when compared to the fourth quarter of 2018, Stats SA announced, with manufacturing falling by 8.8%, mining down 10.8%, agriculture down 13.2% and electricity shrinking by 6.9%. Transport fell by 4.4%, trade was down 3.6% and construction declined by 2.2%. 

Government, on the other hand, grew by 1.2%, finance by 1.1% and personal services by 1.1%. 

If SA's economy contracts again in the next quarter of 2019, the country will enter a recession. 

SA's economy slid into recession in the first half of 2018 after experiencing two successive quarters of negative economic growth. Growth gained pace in the third quarter

Quarterly change in South Africa's GDP over the pa

(Graphic by Stats SA)

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