JOHANNESBURG – Gross domestic product (GDP) data released by Statistics South Africa on Tuesday shows year-on-year growth at 0 percent and quarter-on-quarter growth at -3.2 percent.
This suggests that South Africa is headed for recession in 2019.
Stock exchange indices and foreign sales of SA are indicative of plummeting investor confidence. Bloomberg data shows that by May year-to-date, foreigners had sold off R44 billion of SA equities. In addition, bond flows reversed sharply in the month of May with a R3.6bn outflow.
Business confidence is down across most major sectors, led by manufacturing where the Purchasing Manager’s Index (PMI) fell to 45.4 index points in May, down from 47.2 in April. Agriculture, mining, energy, construction, and trade sectors all contracted year on year.
Consumer confidence has drastically slowed, as shown by the results of retail sector companies as well as household final consumption expenditure. Household final consumption expenditure decreased by 0.8 percent in the first quarter.