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South Africa’s economy is officially in recession

South Africa’s economy is officially in recession

The latest gross domestic product (GDP) data released by Stats SA shows that the South African economy declined by 0.7% in the first quarter of 2017, putting the country into a technical recession.

While the economy has slowed to a crawl over the past few years, the country has managed to escape the dreaded ‘official’ recession tag.

In economic terms, a technical recession is described as two consecutive quarters of economic decline. The last quarter of 2016 showed a 0.3% decline; with the latest decline of 0.7%, South Africa fits the bill.

According to Stats SA the largest negative contributor to growth in GDP in the first quarter was the trade, catering and accommodation industry, which decreased by 5.9% and contributed -0.8 of a percentage point to GDP growth.

The manufacturing industry contracted by 3.7% and contributed -0.5 of a percentage point to GDP growth.

Seven out of ten divisions reported negative growth rates in the first quarter. The largest contributor to the decrease was the petroleum, chemical products, rubber and plastic products division.

In contrast the mining and quarrying industry increased by 12.8%, and contributed 0.9 of a percentage point to GDP growth.

Read: World Bank cuts SA economic growth projections

The agriculture, forestry and fishing industry rebounded in the first quarter of 2017 on the back of eight consecutive quarters of contraction. The industry’s increase of 22.2% in the first quarter of 2017 was mainly as a result of increases in the production of field crops and horticultural products.

One of the key indicators of the declining economy is household spending, which showed a major decline in the first quarter.

Despite the quarterly decline, it is expected that GDP growth will rebound to 0.9% in the second quarter of the year, due to positive data released over the past few months.

The last time South Africa entered a recession was 2008-9, when it had three consecutive quarters of negative growth.

Read: The big problem with South Africa’s ‘debt forgiveness’ plan

BusinessTech's Staff Writer is directly plugged into the South African Internet backbone, and spits out press releases and other news as they receive it. They are believed to be cl...
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  • Cheesy 3.0

    Just another day in Guptastan… ‘recession is a western paradigm’

  • Konstabel Koekemoer

    Just ask Stuttafords, they catered to wealthier customers so even the haves are spending less. Rating agencies were correct with the downgrades .

  • InReality

    We could blame this mess on ‘black monopoly capital’. Later, we could blame Dingaan for something else because, If we can’t beat them, join them. Let’s do what they do best and play the blame game… – Colonial White Monopoly Capitalist

    • bengine

      Fear, anger, aggression the dark side of the force are they.

  • Joe Black

    As far as I’m concerned with a population growing faster than the economy for a while now we were technically in a recession already.

    • Literally Mario

      Growth rate is a whopping 1.6% (India is 1.2% for reference).

      Ons boer agteruit…

      • Joe Black

        Yeah population growth in Africa is set to outstrip that of the rest of the world over the coming decades by a wide margin. Its consistent with prevailing understanding of population dynamics.

        Fertility in Asia is dropping relatively quickly as standards of living increases. To top that off the male populations in China and India is far greater than the female population. So the current populations there are not even sustainable in the relatively short term.

        Most of the world’s population growth will come from Africa. Time for African dictators to hang up their hats and make way for leaders who’s principal objective is to make sure there’s enough work, food and houses for citizens. The alternatives are rather bleak.

        • Robert Dixon

          Finite water and arable land combined with mindless population growth is a disaster on the way (and not too far off, at that).
          Sadly, in africa there is apparently no appreciation of where it will all end.

          Total lack of real leadership to map a sustainable path into the future – and all the while SA’s “leaders” are trailing along behind their masters, the guptas.

          • Joe Black

            In the modern world basically all studies have shown that population growth is a factor of standard of living. The lower the standard of living the more kids people have. But it is declining, just not fast enough to prevent growth of another billion or so in Africa over the new century or so.

            Also do not judge the poor to quickly for making poor decisions (no pun intended). Studies have also shown that impoverishment can temporarily (not permanently) lower anybody’s effective IQ by tens of points just from stress and the fight or flight reflex. People basically make bad decision when they experience stressful conditions where they lack resources or fear running out of resources (food, water, clothing, etc)

            Practically speaking the challenge for South Africa is thus to grow its economy as quickly as many other African nations are doing so that standard of living does not go down and further lower IQ and raise population growth. Leadership is key yes.

          • Robert Dixon

            I am not dumping the blame (or all of it) on the poor.
            Your points are valid, and the experience with Grameen Bank in Bangladesh showed clearly that once women were bringing in an income the incentive to practice family planning limited family size. And small business actually developed!
            My point about leadership is that we don’t have any – hence the miserable prospects for africa and SA.
            The holy grail should really be a sustainable economy, not limitless growth to attempt to keep up with population size. There is an excellent book “Dirt: The Erosion of Civilizations” by Montgomery which describes how population growth contributes to the fall of civilisations as population explodes.

    • johnramsunder

      The population is growing only with all the national foreigners which zuma has allowed to happen. What has our bum president to say about this great recession.

    • Too many missing daddies

  • Me Me

    While at it, don’t forget to vote for Zuma 😀

  • Broscientist

    And of course the gauvament will deny that they, Zuma, the counsel of elders (Guptas) and the ANC have anything to do with this.

  • disqus_YkD3FoTA8A

    Just wait till you see the second quarter’s figures.

  • Pfãrè

    No wonder my Bank balance is so low.

  • Brian

    Very good ANC. Carry on vilifying business and lets see if we can have an “official” recession. Keep up the war on “white monopoly capital” (whatever that rallying cry means) and encourage more government corruption… we will get there.

  • I don’t see the problem,

    “When the Rand falls we will just pick it up” they said…

  • Blapartheid Zulu

    Im waiting for zuma/anc to say that recession is a white men disease XD

    • thieves

      I have a feeling you won’t be waiting long…

    • Paul Goodwill

      Away with your colonial tendencies. Hahaha

    • IceQ

      Or they could spin it, “The economy is being de-colonized”.

      I apologize for using correct punctuation in that, but I can’t really help it. 🙂

  • Tau’ri

    Paramedics are on the scene and busy using the defibrillator on SA, but already a doctor said “Let it go Jim, she’s gone.”

    • Fanandala

      The paramedics have been molested, robbed of their drugs, cell phones, vital equipment and and also their vehicle so they are trying to find a Taxi that takes them back home.

  • Aristophanes

    I blame it all on White Minority Capital myself….

    [better put in a LOL in case anybody thinks I’m serious?]

    LOL. WTF. OMG. etc etc

    • Paul Goodwill

      Don’t be absurd. It’s because of Van Riebeeck and Apartheid.

  • victory

    Where’s ZUMA ancyl and ancwl?

    • Paul Goodwill

      Busy checking out the new R2billion Tshwane HQ…

  • Luna Moon

    well done Mr. president

  • bookworm

    Well duh! most of us already know that there is a recession on long before the govt. saw fit to announce it. Did not exactly require a rocket scientist to figure that! When you are haemorrhaging billions to the corrupt and/or inept kleptocracy I suppose it must be par for the course.

  • gamemaker2

    Mines in a depression

  • Jacob Zupta

    Well done Gorilla.

  • Leon Botha

    We have been in a recession for a while…
    The moment the economic growth is lower than the inflation rate we go backwards.

  • Erlo Muhl

    No1. Government in our country over employs people and many are nonproductive sitting next to the roads being employed but not forced to work as there is zero control and they do utterly zero work. No2. The private sector is penalized to pay minimum wages for some of the workers that are a liability instead of being productive, are loafers and difficult to get rid of. I feel sorry for every person that wants to work and not only hopes’ to be employed and cannot find a job. If free enterprise was not hampered but furthered jobs and economic production would grow and competition will eventually create more jobs and better pay and the economy would start improving slowly at the beginning but the curve would soon work its way up and the country will eventually again have a sounder economy. No3. Government and private enterprise must see to it that they teach their workers to work smarter and harder otherwise our country will turn into a 4th world status soon, as it is heading that way already. Naturaly the employers must also work smarter.

  • the-TRUTH

    Indeed South Africa’s economy is officially in recession because the economy has been technically in recession for over a year ago…
    Tsk, I blame ANC for this self-induced economic decline, hence #ANCMustFall

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