South African economy hit by recession

SOUTH Africa&rsquo;s economy suffered its sharpest contraction in a quarter of a century, declining by an annualised 6.4 per cent in the first three months of 2009 and confirming its first recession in 17 years.<br /><br />Africa&rsquo;s biggest economy has been hard hit by global woes, with recession in developed countries slashing demand for its minerals and manufactured goods. <br /><br />The rand extended losses to more than two per cent against the dollar after the economic data.<br /><br />On an unadjusted basis, South Africa&rsquo;s economy shrank by 1.3 per cent compared to the first quarter of 2008, Statistics South Africa said yesterday, compared with forecasts of a 0.2 per cent fall and pointing to a full year contraction.<br /><br />South Africa&rsquo;s Treasury said it expected the economy to shrink again in the second quarter, but not by as much, and pointed to a recovery on the horizon.<br /><br />&ldquo;We expect there will be an upturn in the second half of the year,&rdquo; Treasury director-general Lesetja Kganyago said, adding there were tentative signs of recovery in the global economy.<br /><br />&ldquo;This confirmation of recession was just a confession of the data that we had been beating in the Treasury. I can assure you that no-one attempted to commit suicide in the Treasury because of these numbers,&rdquo; he added.