South Africa Unexpectedly Slides Into Recession For The First Time Since 2009ZeroHedge
Sep. 04, 2018
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With South Africa reeling amid concerns of land expropriation, the rand tumbling amid broad emerging market fears and the local economy pressured by collapsing consumer spending, moments ago the Pretoria-based Statistics South Africa announced that Q2 GDP contracted at a 0.7% annualized rate, missing expectations of a 0.6% increase, and together with the sharp drop in Q1 GDP, South Africa has now officially entered its first recession since 2009.
There is a certain "rhyming" to this event because as Bloomberg notes, South Africa's new President Cyril Ramaphosa suffered the same false start as his predecessor nine years ago: a recession in his first six months in office.
The decline was largely due to a collapse in agriculture and the farming sector - to be expected at a time when white farmers don't know if they will be allowed to keep their land or have it be forcibly expropriated - and a parallel drop in consumer spending. Some more details from the report:
- Agriculture declined the most, recording an annualized 29.2% contraction
- Manufacturing shrank 0.3%
- Trade contracted 1.9%