S. Africa slips into recession as GDP contracts in Q2

By Hassan Isilow

JOHANNESBURG

Africa’s most industrialized economy slipped into a recession on Tuesday after its gross domestic product (GDP) contracted by 0.7 percent in the second quarter of the current year, the country’s statistics body announced.

“The downturn in the second quarter of 2018 was a result of a fall-off in activity in the agriculture, transport, trade, government and manufacturing industries,” Statistics South Africa said.

The body said agriculture production fell by 29.2 percent in the second quarter of 2018, following a 33.6 percent slump in the first quarter.

It said this was largely driven by a decline in the production of field crops and horticultural products caused by drought conditions in parts of the country.

South Africa experienced its last recession during the 2008-2009 global financial crisis with three consecutive quarters of economic decline.

A country falls into a recession after experiencing two or more consecutive quarters of negative growth.

Mining, construction, electricity, finance and personal services experienced positive growth, but it was not enough to lift overall economic growth out of negative territory.

“Mining’s growth rate of 4.9% was largely spurred on by a rise in the production of platinum group metals, copper and nickel,” the government body said.

Meanwhile, construction activity increased by 2.3 percent driven by a rise in non-residential buildings, and construction work activities.