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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SA braces for verdict from ratings agencies


25 May 2016 at 07:30am

By: Wiseman Khuzwayo

Johannesburg - A team from S&P Global Ratings visited South Africa last week for meetings, the Treasury said, ahead of a review due to be published on June 3, which could see the country’s debt rating cut to junk.

South African officials also spoke to Fitch Ratings by phone, National Treasury spokeswoman Phumza Macanda said.

Read: S&P, Fitch meet SA over review

Fitch has not given a date for its next rating decision.

S&P rates the debt of Africa’s most industrialised country at BBB-, one notch above speculative grade and with a negative outlook, while Fitch assigns a similar rating after a downgrade in December.

Seen by numerous analysts as the most likely to push South Africa to “junk” status, S&P said earlier this month that the weak economy posed an immediate risk to the rating.

“S&P was here last week and concluded all their meetings… They met with government, labour representatives, some political leaders and some business leaders as well,” Macanda said this week.