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South Africa Escapes Recession

 1 min read / 

Second quarter GDP grew by 2.5% due to big rises in agricultural output as the economy avoids a full-out recession.#

Editor’s Remarks: South Africa’s economy had contracted in the previous two quarters, but a recovery in commodity prices led to a 34% rise in agricultural output and a 3.9% rise in a depressed mining sector. The good data brings some much-needed relief to a country hit by the ongoing political turmoil surrounding President Zuma and increased criticism from credit rating agencies regarding central bank independence and high government spending. The central bank also cut its GDP forecast for the year in half to 0.5% and trimmed its forecast for 2018 from 1.5% to 1.2%. But global commodity prices are rising, with copper a hitting three-year high, and a continuation of this trend could lead to a more positive outlook for South Africa’s depressed mining industry and resource-based economy.

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