South Africa's economy shrank by 3.2% in the first quarter of 2019 compared to the last quarter – the worst performance in a decade. The nation could already be in a recession, with little evidence that the economy has caught fire in the second quarter.
Weak levels of investment and more than 270 hours of load-shedding wreaked havoc across the economy, while a gold mining strike and a weak grape harvest added to the pain.
The latest numbers from the Statistics SA show that the economy was exactly the same size in the first quarter of 2019 than it had been in the same quarter of 2018.
"The economy [is] no larger in 2019 Q1 than it was a year earlier. This data release reflects poorly on president Cyril Ramaphosa’s ‘economic stimulus and recovery plan’, launched in September 2018," PricewaterhouseCoopers said in a report. The rand took a painful hit following the GDP release, falling almost 2% to R14.76/$.
Citrus could boost economy in Q2
The second quarter should see a strong boost from agriculture, with the citrus industry on track to reach record exports of 137 million boxes this year due to large output. Citrus farmers have only started with their harvest activities in the second quarter.
However SA’s agricultural industry will probably still shrink over the whole year. This is due to dry weather in the central and western parts of the country which will hurt major summer crops such as maize, soybeans, and sunflower seeds.