SA economy contracts 2%, slipping deeper into recession
CAPE TOWN - South Africa's economy contracted by 2 percent in the first quarter of 2020, slipping deeper into recession as output in the key mining and manufacturing sectors plunged, the national statistics agency said today.
The mining sector shrank by 21.5 percent while the manufacturing industry fell 8.5 percent, with seven out of 10 manufacturing divisions contracting in the first quarter, Statistics SA said.
The electricity, gas and water sector declined by 5.6 percent and the construction industry by 4.7 percent as the economic impact of a national lockdown in response to the worldwide coronavirus crisis became stark.
Exports of goods and services were down 2.3 percent, with the slump in the mining industry as well as that in travel services contributing to the retreat.
Government expenditure rose by 1.1 percent and household expenditure by 0.7 percent during the quarter, the latter driven up by spending on food, beverages, tobacco products and narcotics, StatsSA said. However, spending on transport and clothing declined.
Overall, expenditure on real gross domestic product fell by 2.3 percent, dragged down by investment spending and a draw-down on inventories as the economy came to a near halt from late March. "There was a R67.3 billion draw-down of inventories in the first quarter of 2020. Large decreases were reported for the mining, manufacturing and trade industries," StatsSA said.
Imports of goods and services decreased by 16.7 percent as demand for machinery, equipment and travel services fell. National Treasury expects the country's gross domestic product to shrink by 7.2 percent in 2020, the biggest contraction in 90 years.
- African News Agency (ANA)