South Africa GDP Contracts the Most in 10 Years

The South African economy shrank an annualized 3.2 percent on quarter in the three months to March of 2019, following a 1.4 percent growth in the previous period and compared with market expectations of a 1.7 percent contraction. It was the sharpest quarterly decline since Q1 2009, mainly reflecting the effects of Eskom's power cuts on manufacturing and mining.
Statistics South Africa | Luisa Carvalho | 6/4/2019 2:07:35 PM
The electricity, gas and water sector posted the largest decline since Q3 2015 (-6.9 percent from 0.2 percent), mostly due to reduced electricity distribution amid severe blackouts imposed by power utlity Eskom during the period

Manufacturing declined 8.8 percent, after a 4.5 percent expansion in Q4 2018, as seven of the ten manufacturing divisions reported negative growth. The three largest contributions to the decrease were petroleum, chemical products, rubber and plastic products; motor vehicles, parts and accessories and other transport equipment; and wood and wood products, paper, publishing and printing.

Mining shrank 10.8 percent, following a 3.8 percent decline in the previous period, mostly due to ‘other’ mining and quarrying (including diamonds), iron ore and coal.

The agriculture, forestry and fishing sector plummeted 13.2 percent, after a 7.9 percent surge in Q4, mainly because of a drop in the production of field crops and horticultural products.

Other declines were seen in trade, catering and accommodation (-3.6 percent from -0.7 percent) and transport & storage (-4.4 percent from 7.7 percent), as a result of decreases in both passenger and freight land transport.

In addition, growth slowed in finance, real estate and business services (1.1 percent from 2.7 percent) and personal services (1.1 percent vs 1.7 percent). Conversely, government services rose 1.2 percent, recovering from a 0.6 percent drop in the previous period, mainly attributed to an increase in civil service employment related to the general election.

Year-on-year, the economy showed no growth, following a 1.1 percent expansion in the previous period and missing market expectations of a 0.7 percent growth.

South Africa GDP Contracts the Most in 10 Years