SA has slipped into a recession after its gross domestic product (GDP) declined 0.7% during the first quarter of 2017, after contracting by 0.3% in the fourth quarter of 2016. What is a technical recession? It is when an economy suffers two consecutive quarters of negative economic performance. It refers to shrinking economic output, sometimes also known as negative economic growth or economic decline. In short, it implies that the economic activity of a country is declining. This is never a good thing. In SA’s case it is particularly serious because the country needs strong economic growth to make inroads into unemployment, which currently stands at more than 27%. SA desperately needs a strong economy for other reasons too: citizens’ living standards cannot improve without economic growth; and the economy needs to grow for the government to increase revenue to meet its growing social welfare budget. There are other ways to describe a recession, although the technical definition is ...
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