Shocking drop in agriculture behind 'surprise' recession

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.

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