Recession officially hits SA

SA has officially entered a technical recession.

Gross domestic product (GDP) contracted by 0.7% quarter on quarter in the first quarter of 2017 — a shock as the consensus among economists was a rebound to 0.9% growth

A technical recession is based on two consecutive quarters of a decrease in GDP. GDP in the fourth quarter of 2016 contracted by 0.3%.

The largest negative contributors to growth were the trade‚ catering and accommodation industry‚ which slumped by 5.9% and detracted 0.8 of a percentage point from GDP growth (down by R16bn to R148bn) and the manufacturing sector contracted by 3.7%‚ down 0.5 of a percentage point (by R4bn to R129bn).

Mining was down by R14bn to R129bn‚ while government expenditure was down by R2bn to R170bn.

Nominal GDP was R1‚102bn‚ R17bn less than last quarter. Expenditure on real GDP fell by 0.8% in the first quarter.

GDP is up 1% compared to the same period last year.