It feels like this economy's in a death spiral - Bruce Whitfield, The Money Show
South Africa’s Gross Domestic Product (GDP) contracted by 2% in the first quarter (Q1) of 2020, Statistics South Africa announced on Tuesday.
It’s the third consecutive quarter of economic contraction.
GDP fell by 0.8% in Q3/2020 and by 1.4% in Q4/2020.
Mining fell by 21.5%, the steepest decline in six years.
Manufacturing was down by 8.5% while construction fell by 4.7%, the seventh contraction in a row.
The lockdown started on 27 March and this data, therefore, doesn’t capture its impact on the economy.
Finance Minister Tito Mboweni last week said he expects the economy to shrink by 7.2% in 2020, its worst performance in 90 years.
Saville is the Chief Executive of Cannon Asset Managers and Professor in Economics, Finance and Strategy at Gordon Institute of Business Science (Gibs).
It feels like this is an economy in a death spiral!Bruce Whitfield, presenter - The Money Show
Our per-person income is about the same today as 10 years ago…Professsor Adrian Saville, CEO - Cannon Asset Managers
Agriculture showed a very big bounce… a little bit of buoyancy in the household sector…Professsor Adrian Saville, CEO - Cannon Asset Managers
We have run out of money! We must make hard decisions, now! We are in an exceptionally hard place. The only way to get out is to… batten down on state-owned enterprise, bringing down our public sector wage bill, demanding infrastructure investment is assessed on impact and delivery…Professsor Adrian Saville, CEO - Cannon Asset Managers
The -20% [fixed investment] points to an economy that stays in a recession… We must shift that number… It’s not about bailing out airlines! It's about making sure the investment translates into infrastructure…Professsor Adrian Saville, CEO - Cannon Asset Managers
Listen to the interview in the audio below.
This article first appeared on CapeTalk : It feels like this economy's in a death spiral - Bruce Whitfield, The Money Show
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