[Ed. – A shocking drop in agriculture? Whatever could have precipitated that? Here’s a possibility.]
SA has plunged into a recession with a surprise 0.7% contraction in the second quarter of the year.
“We are in recession. We reported a contraction in the first quarter even with revisions and now in the second quarter with a fall of 0.7%, we are in recession,” statistician-general Risenga Maluleke said in Pretoria on Tuesday.
This is despite expectations from many economists that SA would narrowly miss a recession. The Bloomberg consensus was 0.6% growth.
The rand weakened sharply shortly after Statistics SA released the news:
But it soon recovered somewhat: after weakening to R15.25/$ at about 11.45am, the rand appeared to be over its worst and was back under R15.20/$ by 11.48am.
A recession is defined as two consecutive quarters of declining gross domestic product (GDP) and points to a prolonged slowdown in economic activity, which stunts job creation and damps investment.