SA economy shrunk by 2.2% in Q1. Here's why

South Africa's economy shrunk by 2.2% in the first quarter of 2018 after expanding by 3.1% in the final quarter of last year.

The 2,2% fall is the largest quarter-on-quarter decline since the first quarter of 2009.

According to Stats SA, "the agriculture industry lost ground in the first quarter of 2018, contracting by 24,2%, the largest quarter-on-quarter fall since the second quarter of 2006."

Furthermore, "mining entered into recession with its second consecutive quarter of economic decline. Production was down 9,9% in the first quarter of 2018, following on from a decrease of 4,4% in the fourth quarter of 2017. Lower production in gold, platinum group metals and iron ore were the main contributors to falling performance."

Key findings

*South Africa's gross domestic product (GDP) growth rate declined by 2,2% in the first quarter of 2018.

*The largest negative contributor to growth in GDP in the first quarter was the manufacturing industry, which decreased by 6,4% and contributed -0,8 of a percentage point to GDP growth.

*The mining and quarrying industry decreased by 9,9% and contributed -0,8 of a percentage point.

*The agriculture, forestry, and fishing industry decreased by 24,2% and contributed -0,7 of a percentage point to GDP growth.

*The trade, catering, and accommodation industry decreased by 3,1%. Decreased economic activity was reported in trades, catering and accommodation divisions.

*Finance, real estate and business services increased by 1,1% in the first quarter. Increased economic activity was reported for insurance and auxiliary activities and real estate activities.

*General government services increased by 1,8%, attributed to an increase in employment numbers.

For more information, visit Stats SA.


This article first appeared on KFM : SA economy shrunk by 2.2% in Q1. Here's why


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