SOUTH Africa’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.
Africa’s biggest economy has been hard hit by global woes, with recession in developed countries slashing demand for its minerals and manufactured goods.
The rand extended losses to more than two per cent against the dollar after the economic data.
On an unadjusted basis, South Africa’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.
South Africa’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.
“We expect there will be an upturn in the second half of the year,” Treasury director-general Lesetja Kganyago said, adding there were tentative signs of recovery in the global economy.
“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,” he added.