WATCH: 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.
GDP is up 1% compared to the same period last year.
WATCH How South Africa got into recession