26 August 2014

Africa: South Africa Narrowly Avoids Recession

Photo: Anglo Thermal Coal
Miners at the coal face in Greenside Colliery.

Africa's most advanced economy grew by 0.6 percent in the second quarter following a contraction in the first quarter. The country has avoided recession for now, but its economy remains fragile.

Paltry growth of just 0.6 percent in the second quarter compared with the previous quarter meant South Africa narrowly avoided recession, which is defined as two consecutive quarters of negative growth.

Growth had dipped by 0.6 percent in the first quarter of 2014, dragged down by a crippling five-months long miners' strike in the platinum sector. It was the worst quarterly performance in five years.

Africa's most advanced economy is also struggling with high unemployment, high inflation and high levels of poverty and inequality.

The banking crisis that has seen one lender, African Bank, bailed out and the country's five biggest banks downgraded by credit ratings agencies has also affected growth.

According to the country's statistics office, bright spots include the services,transport, finance and property sectors.

(AFP, dpa)

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