The South African economy is mouldy toast

JUST IN: South Africa's economy slips into first recession since 2009

Massive declines in the agricultural, transport and retail sectors have dragged the South African economy into recession after almost a decade of growth.

ANC head for economic transformation Enoch Godongwana said looming economic turmoil was being triggered by and declining growth in fixed capital investment, a persistent current account deficit, and household consumption expenditure that had declined.

South Africa officially entered a technical recession on Tuesday signalling danger for the ANC's election campaign ahead of next years elections.

Godongwana says the technical recession is the result of a prolonged trend of slowing economic growth.

He says government's confident it can turn the situation around.

Government should upscale investing in economic and social infrastructure that include work on public buildings, courthouses, schools, transportation infrastructure, government hospitals, public safety facilities and equipment, water and sewer projects, environmental projects, energy projects, government housing projects and public utilities. So we made a number of areas in our policy statement listing a number of these interventions: "cutting data costs, announcing the spectrum auction".

Statistics South Africa said on Tuesday that gross domestic product declined 0.7% in the second quarter, after a 2.6% contraction in the first three months of the year. But what does it mean for South Africa and its people? However, the ruling African National Congress (ANC) has reaffirmed its commitment to the plan.

"The only sectors to make any meaningful positive contribution were mining, construction and finance, real-estate and business services, all of which came off a very weak base".

South Africa's economy has fallen into recession for the first time since 2009.

A recession is defined as two consecutive quarters of declining gross domestic product (GDP) and points to a prolonged slowdown in economic activity‚ which stunts job creation and damps investment.



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