Data is bleak even before latest turmoil
Domestic prospects have taken a turn for the worse
The prospect of a recession is rearing its head. The last time South Africa entered a recession (the only time as a democratic state) was in the first quarter of 2009, as the global financial crisis wreaked havoc on developed and emerging markets. A recession is defined as two consecutive quarters of negative economic growth. We will only know if the country truly is in recession when first-quarter GDP data is released in the first week of June, but early data is not promising. February mining and retail trade sales data came in at a miserable -3.6% year on year and -1.7% respectively, both after poor January numbers. Combined, these two sectors make up more than a quarter of GDP, and an equal portion of the workforce.Better global growth has seemingly not lifted domestic manufacturing production, and a moderating inflation profile has not provided any household consumption impetus. What we have seen, as in the Reserve Bank's Quarterly Bulletin, is household deleveraging. Household ...
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