Shocking drop in agriculture behind 'surprise' recession
Agriculture fell almost 30%, dragging the GDP number down
SA is reeling at a "surprise" recession, after the government reported worse-than-expected GDP numbers. Most analysts had expected a moderate increase in GDP.
The rand was battered after the number surprised to the downside.
But the most shocking number in the statistics is the precipitous 29.2% decline in agricultural production over the second quarter.
According to Investec, the drop in GDP was "contrary to market expectations of a mild lift in GDP".
The agricultural sector was the worst performer once again, falling 29.2% quarter-on-quarter seasonally adjusted annualised, following a plunge in the first quarter of 2018, Investec said.
Statistics SA said: “The decrease was mainly because of a drop in the production of field crops and horticultural products”.
Agriculture "detracted a significant 0.8% from the headline outcome", Investec said.
The decline in agriculture wiped out a gain of 4.9% in the mining and quarrying sector, while manufacturing and transport also fell.