Contraction in economy looms in the first quarter
Weak performances in the mining and manufacturing sectors, too, indicate that the economy contracted
Weak performances in the retail, mining and manufacturing sectors, which bore the brunt of the most severe power cuts the country has experienced yet, indicates that the economy contracted in the first quarter of the year. The dismal data comes just a week after the ANC’s victory in last week’s general elections and underlines the scale of the economic challenges faced by President Cyril Ramaphosa, who has vowed to resuscitate the economy. A weak first quarter will likely cause economists and institutions to revise down growth forecasts, keeping a lid on the economy for another year.
Load-shedding, which returned in November, resulted in a loss of tradable hours for retailers and a halt in production in the mining and manufacturing sectors. Retail trade sales decreased by 0.7% in the first quarter of the year, data from Statistics SA showed on Wednesday. The retail sector is an important indicator of consumer spending, which drives growth in the economy as it accounts for just...