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According to the latest economic figures recently released by Stats SA from the SA, a negative picture is being sketched despite the political euphoria surrounding president Cyril Ramaphosa and the steps he takes to curb corruption.

These figures show that in the first quarter of this year, the economic growth rate was lower than expected, while GDP shrunk by a shocking 3.2%. This fall has been the biggest fall since 2009 when the economy contracted 6.1% during a global economic downturn.

The manufacturing sector has shrunk by almost 9%, but all sectors have declined, with the agricultural industry being the weakest with a negative growth rate of -13.2%. After the SSA announcement, the Rand fell by 1.4%, while banks dropped by 3.2% on the JSE. Economists believe these growth rates can force the Reserve Bank to lower interest rates later this month.

With a significant 3.2% reduction in quarter-on-quarter GDP growth and 0% year-on-year growth
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Despite the great optimism surrounding Ramaphosa’s election as ANC president, there has been no growth in the domestic economy.

Rather, the decline can be notice after the latest figures where released. Gross Domestic Production weakened by a shocking 3.2% in the first quarter of 2019.

This is the biggest fall since the world wide financial crisis in 2009. The manufacturing sector fell by almost 9% but all sectors showed a downward growth. The Rand fell by 1.4% after the figures were announced, while banks dropped an average of 3.2% on the JSE.

All that has increased is the government’s 1.3% increase in expenses. Economists believe the figures could force the Reserve Bank to lower interest rates at their next meeting in June 2019.

The major reason for the “depression” in the economy is power outages and higher income taxes. A further worrying figure is the 26.4% drop in exports.

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