Thabi Leoka, economic strategist at Argon Asset Management, speaks about a surprise contraction in first-quarter growth

BUSINESS DAY TV: SA’s back in recession for the first time since 2009 after surprising with a 0.7% contraction in GDP in the first quarter of the year, and that follows a 0.3% slippage in the fourth quarter of last year. And with two ratings downgrades at the beginning of the second quarter, could there be more to come? Joining us with her thoughts is Thabi Leoka, economic strategist at Argon Asset Management. Thabi, so SA officially in a recession. We had economists polled expecting a 0.9% expansion for the first quarter. Was the bar of expectation simply not set too high in the first place because this is getting things quite wrong? THABI LEOKA: It is and it’s always very difficult to gauge where the first quarter GDP will be. If you look at the forecasts, they range from 1.5% all the way to a small contraction and my forecast was 0.4%, and I was a bit anxious because I thought it was a bit on the lower end when compared to other forecasts. There were some surprises that would hav...

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