According to the latest economic figures recently released by Stats SA from the SA, a negative picture is being sketched despite the political euphoria surrounding president Cyril Ramaphosa and the steps he takes to curb corruption.
These figures show that in the first quarter of this year, the economic growth rate was lower than expected, while GDP shrunk by a shocking 3.2%. This fall has been the biggest fall since 2009 when the economy contracted 6.1% during a global economic downturn.
The manufacturing sector has shrunk by almost 9%, but all sectors have declined, with the agricultural industry being the weakest with a negative growth rate of -13.2%. After the SSA announcement, the Rand fell by 1.4%, while banks dropped by 3.2% on the JSE. Economists believe these growth rates can force the Reserve Bank to lower interest rates later this month.
With a significant 3.2% reduction in quarter-on-quarter GDP growth and 0% year-on-year growth, several parties are disgruntled with the latest developments, but also concerned about the possibility of a recession. According to the Institute for Racial Matters (IRR), the lack of economic growth is attributed to five reasons: the ANC government’s economic policies, threats of expropriation without compensation, black economic empowerment, hostile labour regulations and poor education. There is quite a consensus that if the government wants to revive the economy, all five of these areas will have to undergo drastic policy reversal.
-Read the original article in Afrikaans on Ditsem Nuus
This report does not necessarily reflects the opinion of SA-news.