JOHANNESBURG, South Africa’s economy contracted by 1.4 percent percent in the fourth quarter of 2019, slipping into a technical recession after shrinking by a revised 0.8 percent in the third quarter, the national statistics agency said on Tuesday.
Overall, Africa’s most industrialised but ailing economy grew by just 0.2 percent last year, the lowest reading since 2009 when it contracted 1.5 percent during a global financial crisis, Statistics South Africa said.
The 2019 outcome is slightly worse than the 0.3 percent growth estimate Finance Minister Tito Mboweni gave last week when he presented the 2020 budget in Parliament.
In the fourth quarter, a decline in both freight and passenger transport dampened growth in the transport and communication industry, which slumped by 7.2 percent and contributed a negative 0.6 percentage points to the 1.4 percent fall in gross domestic product.
Retail trade sales and restaurant trade were up, but this was insufficient to counteract the fall in motor trade, wholesale and accommodation, which dragged the trade industry lower by 3.8 percent. The sector was the second biggest drag on GDP.
“The country produced less motor vehicles and transport equipment in the fourth quarter, contributing to the 1.8 percent dip in manufacturing. Wood, paper and publishing production was also down, further hurting the industry,” Stats SA said.
Petroleum production was up as a result of recovery from plant maintenance in the previous quarter, but this was not enough to lift overall manufacturing growth into positive territory.
Construction recorded the longest losing streak, Stats SA said, with its sixth consecutive quarter of economic decline. The beleaguered industry has only seen one quarter of positive growth since the beginning of 2017.
Agriculture experienced its fourth consecutive quarter of negative growth, falling by 7.6 percent.
“Late rains and heatwave conditions across the country in particular Eastern Cape and Free State affected the production of field crops. The country also produced less horticulture products in the fourth quarter,” the statistics agency said.
As drought affected one industry, heavy rains damaged another, with flooding at some power stations and disruptions to coal deliveries caused by rain contributing to the electricity, gas and water supply industry’s poor showing in the fourth quarter.
The mining sector however recorded positive growth in the last three months of 2019, albeit just 1.8 percent, contributing 0.1 percentage points to overall GDP movement.
The finance industry increased of 2.7 percent and added 0.6 percentage points to overall GDP.
Source: African News Agency