South Africa: Shock as SA's First-Quarter Economic Growth Shrinks By 3.2 Percent

Left: ANC Secretary General Ace Magashule. RIght: Finance Minister Tito Mboweni.
analysis

Days after President Cyril Ramaphosa pledged to implement his economic reform plans during his inauguration, the latest economic growth figures underscore the urgency in which he has to fix SA's broken economy. During the first quarter, the economy recorded the largest contraction since the global financial crisis 10 years ago. It's the first time the impact of recent rolling blackouts on the economy is laid bare.

South Africa's economy shrank by a shocking 3.2% in the first quarter of 2019, the largest decline seen since the global financial crisis 10 years ago.

The decline in SA's gross domestic product (GDP) in the first quarter of 2019 surpassed expectations by economist and market watchers, who expected the economy to contract by 1.6%, according to a Bloomberg survey. Economists polled by Reuters expected a contraction of 1.7%.

The shocking decline also underscores the enormous task that President Cyril Ramaphosa has in fixing the country's broken economy and the urgency in which his economic reform measures must be implemented by his new Cabinet.

After all, SA's economy has failed to punch above the 2% annual growth levels since 2013.

The rand reacted immediately as it weakened by 20 cents against the US dollar...

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