South Africa’s economy contracts at sharpest rate in 9 years

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SOUTH AFRICA (Financial Times) – South Africa’s economy contracted at the sharpest rate in almost a decade in the first three months of the year, according to official statistics, underlining the challenge confronting President Cyril Ramaphosa’s bid to revive growth.

Gross domestic product in Africa’s most industrialised country dropped 2.2 per cent on an annualised basis during the first quarter as mining, manufacturing and agriculture all recorded marked falls in activity, the statistics office said on Tuesday.

South Africa’s economic data have been volatile of late, with GDP rising at a 3.1 per cent rate in the last quarter of 2017 and a feared recession between 2016 and 2017 vanishing from the figures after subsequent revisions.

Overall last year the economy expanded by 1.3 per cent versus 0.6 per cent in 2016, the first time growth accelerated in four years. The South African Reserve Bank is forecasting growth of 1.7 per cent this year.

But the contraction at the start of 2018, the sharpest slowdown in nine years, underscores the fragility of the economy after years of stagnation during the corruption-plagued presidency of Jacob Zuma, who stepped down earlier this year.

Under the weight of several embarrassing scandals, the ruling African National Congress forced Mr Zuma out in favour of Mr Ramaphosa, a trade unionist turned wealthy tycoon who has pledged a business-like approach to government and to root out corruption.

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