GDP falls again: Here are the major factors causing this slump
President Ramaphosa has suffered another knock-back in his bid to get the economy on track. Despite an improved performance in Q2, the next three months have not been kind to the economy, and GDP has shrunk by 0.6% – the mining industry has taken the biggest hit of the lot, too.
South Africa’s economy contracted by 0,6% in Q3:2019.#StatsSA #GDP pic.twitter.com/NLQkMnJtGL
— Stats SA (@StatsSA) December 3, 2019
Ramaphosa’s food for thought: GDP for South Africa in 2019
Previously, Stats SA had revealed that the GDP, in Q1:2019, had dropped by 3.1% and stood at R1.20-trillion, after a sluggish start to the year. The nose-dive was sparked by Eskom’s chaotic load shedding schedules.
However, the stats authority indicated that positive contributions from a number of sectors drove up the GDP to a nominal standing of R.126-trillion by the end of Q2:2019, totalling a 3.1% growth that basically puts us back to exactly where we were at the beginning of the year. However, Tuesday has seen SA take another step backwards.
Industries which grew:
Of the 10 major business sectors in South Africa, only a minority of the experienced a positive change in the past three months. There were some small signs of encouragement, though: While trade seems to be soaring, government affairs and the financial sector have also enjoyed a fruitful third quarter:
- Trade – up by 2.6%
- Government – up by 2.4%
- Finance – up by 1.6%
- Personal Services – up by 0.4%
Industries which regressed:
Mining saw the biggest decrease of the bunch, seeing its quarterly stats fall by 6.1%. Elsewhere, the results have also been bruising for agriculture, which saw its third-consecutive quarter of contraction. Lower production was recorded for field crops such as maize, wheat, sunflower seeds, tobacco & soya beans.
The transport, storage & communication industry also found itself on the back foot, falling by 5.4%. This is the biggest q/q fall for the industry since 1993. Meanwhile, manufacturing dropped 3.9%, due to lower production of basic iron, steel, machinery products, and products related to petroleum, chemicals & plastics.
- Mining – down 6.1%
- Transport – down 5.4%
- Electricity – down 4.9%
- Manufacturing – down 3.9%
- Agriculture – down 3.6%
- Construction – down 3.7%
#Mining was one of the biggest drags on growth in Q3:2019, down by 6,1%, driven largely by a fall in the production of platinum group metals, coal and iron ore.
— Stats SA (@StatsSA) December 3, 2019
Listen here for more: https://t.co/obC568xbS1 #StatsSA #GDP pic.twitter.com/gK0eeP5Nkl
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