GDP shock as economy shrinks 2.2%, worst showing in nine years

SA’s economy shrank by a shock 2.2% in the first quarter of 2018 compared with the final quarter of last year – with the surprisingly poor performance due to a plunge in the agricultural sector of 24.2%. This is the largest quarterly fall since the second quarter of 2009. Economists had expected a contraction of 0.5% quarter on quarter. The rand reacted immediately and dramatically, weakening by about 10c against the dollar shortly after 11.30, to about R12.65.  SA's gross domestic product (GDP) grew 0.8% compared with the same quarter in 2017, well below a Trading Economics consensus forecast of 1.9%. Mining fell 9.9%, manufacturing 6.4% and construction 1.9%, Statistics SA said on Tuesday. The decline in the manufacturing sector was largely due to the petrochemicals and metals subsectors. Government services grew 1.8% and financial services 1.1%. Government services had been bolstered by activities conducted by the Independent Electoral Commission in the first quarter, statist...