Shock as GDP shrinks 1.2%

BY HILARY JOFFE,  09 JUNE 2016, 05:48

SA’s worse than expected economic growth performance in the first quarter of 2016 presages a bleak year ahead.

Statistics SA (Stats SA) data out on Wednesday showed an unexpected contraction in consumer spending and a sharp decline in investment, with mining and transport the biggest drag on growth.

Though economists were reluctant to talk of recession after just one negative quarter, they will revise growth forecasts down after GDP contracted at an annualised 1.2% in the first quarter, down from a positive 0.4% in the fourth quarter of 2015.

The figure was well below the consensus forecast of just a 0.1% shrinkage.

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