Gross Domestic Product Shrinks By 2.2% – Stats SA

PICTURE: BusinessTech

JOHANNESBURG: The gross domestic product has fallen by 2.2 % in the first quarter of 2018, Statistics South Africa (Stats SA) said on Tuesday.

Statistician General Risenga Maluleke said the economy shrank 2.2% quarter-on-quarter thanks to the agriculture, manufacturing and mining sectors. Electricity, construction and trade also recorded negative growth. This follows growth of 3.1% in the fourth quarter of last year.

This is the biggest quarter-on-quarter decline since 2009, when the economy contracted by 6.1%.

The agriculture industry contracted by a massive 24.2% in the first quarter of 2018, which is the largest quarter-on-quarter fall since the second quarter of 2006.

Stats SA said agriculture’s relatively strong performance in 2017 was one of the reasons behind the economy’s strong performance.

“This momentum failed to carry through to 2018, with decreased production in field crops and horticultural products contributing to the decline in the first quarter,” Stats SA said in a statement.

“Mining entered into recession with its second consecutive quarter of economic decline. Production was down 9,9% in the first quarter of 2018, following on from a decrease of 4,4% in the fourth quarter of 2017. Lower production in gold, platinum group metals and iron ore were the main contributors to falling performance.”

Manufacturing fell by 6.4%, largely driven by a fall in production, while the trade, construction and electricity industries all recorded negative growth.