Time to tighten our belts as recession hits
Our economy shrank by 2.6% during the first three months of this year. In the second quarter our economy declined by 0.7%. As a result, we are in what economists would call a technical recession.
The last time our country experienced a recession was nine years ago. Back then Jacob Zuma had just been inaugurated as president.
However, the factors that led to our economy shrinking then had nothing to do with Zuma.
It was triggered by American financial institutions lending money recklessly and it resulted in the biggest banking crisis since the Great Depression of the 1930s.
However, it didn’t last long. Within 18 months several economies started to show growth and over the next five years some recorded impressive growth figures.
But not South Africa. We limped along, barely getting over 4% annual growth in the last decade. For this, Zuma and the ANC must take some responsibility. They’ve put us in such a predicament that things don’t look like they will get better soon. There’s simply nothing in sight to kick-start our economy.
The rand weakened on the news that we were in a technical recession. That will push up prices and leave us with even less money to spend.
A Daily News reader of many years had some good advice: “We’ve been in recession before, many times before. We will overcome. Spend wisely on what is essential to you.”