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South Africa's biggest quarterly GDP decrease in about ten years

Christian Fernsby ▼ | June 5, 2019
South African gross domestic product (GDP) growth contracted 3.2 percent in the first quarter of 2019, the biggest quarterly decrease in about ten years, Statistics South Africa said on Tuesday.
South Africa
African economies   South Africa's GDP declines 3.2 percent in Q1
Statistician General Risenga Maluleke said that seven of ten key industries contributed to the decline.

Mining registered its third consecutive negative growth. "A fall off in diamond, iron ore, and coal production pulled the industry down 10.8 percent. This is mining's biggest decline since 2016," Maluleke said.

Jannie Rossouw, Head of School of Economic and Business Sciences at the University of the Witwatersrand, said South Africa's energy problems have played a role in the growth decline.

"The contraction was to be expected in value of the load shedding of Eskom that did the economy so much damage. These sectors can't grow without stable supply of electricity. Power issues must be sorted out," he said.

With the overall growth projected to be at 1.3 percent in 2019, Prof Rossouw said it should be revised.

"Lower growth has serious implications for the fiscal position because the budget has been done on the basis that the economy will grow at a certain rate. The National Treasury will have to revise its projected growth," he added.