SA Technical Recession Technically Over
The latest StatsSA figures showed the SA economy grew by 2.2% over the last quarter. The Rand even performed slightly better over those 3 months and this then technically brought an end to the local economic recession.
You may recall that there had previously been a recession at the end of 2016 and start of 2017 which was later dubbed to have been a bit of a mistake and that once the stats for the time period were reviewed everyone agreed that a recession hadn’t actually happened. Well, 2018 was a different story with growth slowing and dropping and putting the country into recession (technically speaking) as many months passed with the economy stagnating.
Though 2.2% may seem a very small figure it was actually higher than a lot of economists had been expecting (1.5%) as you can see in the chart below.
Who knows, the maths people may even later go back and decide there was never even a recession this year either (like they did about the 2016/17 nonrecession)?
The Road Ahead
With land expropriation and possible eventual debt write-offs through Debt Intervention on the horizon, it is likely that Moodeys will join the other rating agencies and put SA firmly into “Junk “status meaning less new foreign investment and lots of funds flowing out of the country in the months and years ahead. This combined with other pressures is set to place the economy under renewed pressure in the not too distant future. For now, however, one can take a moment and enjoy the of the recession especially if you are one of the few South Africans not weighed down by crushing personal debt.
