Contraction shows SA's reforms are a day late and a rand short

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The Covid-19 coronavirus pandemic has severely curtailed economic activity in South Africa.
The Covid-19 coronavirus pandemic has severely curtailed economic activity in South Africa.
iStock/ Coffeekai

South Africa's economy contracted 2% in the first quarter of 2020, Statistics South Africa reported on Tuesday morning. This extends the technical recession that the country found itself in in the last quarter of 2019.

The release of Stats SA's latest quarterly GDP figures comes a week after Minister of Finance Tito Mboweni tabled his supplementary budget in response to the Covid-19 pandemic. Treasury now expects SA's GDP to contract by a record 7.2% in this year, while tax revenues are projected to fall R300 billion short of the what was estimated in February's budget. 

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