South Africa has been hit by a technical recession after recent surveys revealed that that the country’s Gross Domestic Product (GDP) contracted to minus 0.7 percent in the first quarter of 2017, few months after the country’s economy shrunk by 0.3 percent in the final quarter of 2016.
Recent figures from Stats SA shows that trade was the largest negative contributor to GDP growth in the first quarter while the accommodation industry, which decreased by almost 6 percent , contributed minus 0.8 percent to the nation’s GDP growth.
The manufacturing industry contracted by 3.7 percent and contributed negative 0.5 percent even as petroleum, chemical products, rubber and plastic products made up the largest contributors to the contraction.
This recent development may not have come as a surprise to most South Africans as economic analysts have in the recent past, warned of a shrinking in the country’s economy following the cabinet reshuffle by President Jacob Zuma that saw the sacking of widely respected Pravin Gordhan as Finance Minister.
Just last weekend, Head of African National Congress (ANC) Subcommittee on Economic Transformation, Enoch Godongwana had warned that a recession was likely to hit the country as interest rates soared amidst inflation.