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Tuesday, 6 June 2017
South Africa falls into second recession in a decade
Africa has fallen into recession for the first time in eight years
after economic growth shrank by 0.7% between January and March.
downturn, due to weak manufacturing and trade, follows a 0.3% fall in
GDP in the final quarter last year.
is the first time that economic has slowed for two consecutive
quarters - the technical definition of a recession - since 2009.
value of the rand fell by 1% on the currency markets.
had expected GDP to grow by 0.9% during the first quarter. However,
Joe de Beer, deputy director general of Statistics South Africa,
said: "We can now pronounce that the economy is in recession."
added: "The major industries that contracted in the economy were
the trade and manufacturing sectors."
third-largest economy is under pressure after President Jacob Zuma
fired its respected finance minister, Pravin Gordhan, earlier this
prompted two credit rating agencies, Standard and Poor's and Fitch,
to downgrade South Africa's credit worthiness to junk.
means it is more expensive for South Africa to borrow money, because
it is seen as having a higher risk defaulting on its debts.
week, S&P and Fitch pointed to further concerns about the South
African economy, including uncertainty over who will succeed
President Zuma as leader of the ruling African National Congress.
successor is expected to be chosen in December, but Mr Zuma can
remain as head of state until an election in 2019.