South Africa records GDP fall by 3.2 pct, agri, manufacturing industry dwindled

The first quarter of 2019 has witnessed a contraction of South Africa's gross domestic product by 3.2 percent. This collapse is considered the biggest quarterly decrease in about ten years, according to Statistics South Africa.

According to Statistician General, Risenga Maluleke, seven of ten key industries contributed to the decline. Mining registered its third consecutive negative growth. "A fall off in diamond, iron ore, and coal production pulled the industry down by 10.8 percent. This is mining's biggest decline since 2016," Maluleke said, as reported by Xinhua.

On the other hand, agriculture production dwindled by 13.2 percent with manufacturing industry by 8.8 percent. The last time South Africa recorded a huge economic decline was in 2009 when the economy, under strain from the global financial crisis, tumbled by 6.1 percent.

South Africa's energy problems have played a role in the growth decline, according to Head of School of Economic and Business Sciences at the University of the Witwatersrand, Jannie Rossouw.

"The contraction was to be expected in value of the load shedding of Eskom that did the economy so much damage. These sectors can't grow without stable supply of electricity. Power issues must be sorted out," he added. With the overall growth projected to be at 1.3 percent in 2019, he said it should be revised.

"Lower growth has serious implications for the fiscal position because the budget has been done on the basis that the economy will grow at a certain rate. The National Treasury will have to revise its projected growth," he added, Xinhua noted.

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