South African economy enters recession as Q4 2019 GDP contracts

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FILE PHOTO: South African President Cyril Ramaphosa ./REUTERS/Denis Balibouse/File Photo
FILE PHOTO: South African President Cyril Ramaphosa
./REUTERS/Denis Balibouse/File Photo

South Africa’s gross domestic product contracted 1.4% in the fourth quarter of 2019, following a revised 0.8% contraction in the third quarter, data from Statistics South Africa showed on Tuesday.

Economists polled by Reuters had predicted a contraction of 0.1% in quarter-on-quarter and seasonally adjusted terms in the final three months of last year.

GDP shrank 0.5% year-on-year in the fourth quarter after a 0.1% expansion in the previous quarter. The economy expanded 0.2% in the 2019 calendar year compared to 0.8% in 2018.

The fourth-quarter decline is larger than economists had predicted, as the economy battles the fallout of load shedding.

Seven out of 10 industries contracted in the fourth quarter, with agriculture (-7.6%) taking the biggest hit.

The weak growth is likely to add more woes to President Cyril Ramaphosa’s government, as the economy under his leadership continues to suffer, amid internal and external pressures.

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