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Economy contracts for third straight quarter, deepening recession

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There was a contraction 2% according to Stats SA, which was better than market expectations of a quarterly decline of 4%

SA’s economy shrank for the third consecutive quarter, at the start of this year, testament to the difficulties it faced even before the onslaught of the coronavirus pandemic.

Alongside an already weak growth environment, the first three months of the year experienced rolling power cuts by embattled power utility Eskom. Mining and manufacturing were the biggest drags on growth, with mining declining 21.5% and manufacturing 8.5%. In the weeks ahead of the lockdown, SA had already instituted some regulations. Some of SA’s trading partners were already experiencing pandemic-related shutdowns, which affected SA’s trade and supply chains during the quarter, De Beer said.

Despite an increase in business activity, the economy is expected to contract 7.2% this year according to the Treasury. Estimates from some private economists and business organisations believe the contraction could exceed 10%.

Source: News Formal (newsformal.com)

 

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