Ramaphosa’s dream of growth in tatters
Market reaction swift and rand hits new two-year lows as data show first recession since 2009
SA will struggle to register barely positive growth for 2018. That is the reality facing President Cyril Ramaphosa, six months after he was swept to power on a wave of optimism that he would reverse the decay of the Zuma years. His dream of boosting growth to 3% this fiscal year is in tatters, and leaves him vulnerable to opponents both inside and outside the ANC as he prepares to fight an election in 2019, hobbled by a near 30% unemployment rate, which is set to rise further. Shock data from Stats SA on Tuesday showed that the economy contracted 0.7% in the second quarter, adding to a 2.6% decline in the previous three months (initially reported as a 2.2% decline). It is the first recession since 2009, when the economy was caught up in the midst of the worst global financial crisis since the Great Depression. The reaction from the market was swift and brutal on Tuesday, with the rand weakening to R19.75 against the pound, its weakest level since June 2016 — one of the most chaotic ...
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