Sunday 22nd October, 2017
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S/Africa's economy contracts as mining, manufacturing slip

S/Africa's economy contracts as mining, manufacturing slip

South Africa's economy contracted 0.3 percent quarter-on-quarter in the final three months of last year as mining and manufacturing output shrank, the statistics agency said on Tuesday, putting credit ratings at risk.
 
Africa's most industrialised economy faces the risk of being downgraded to junk status owing to weak economic growth after it got a reprieve last year. S&P and Fitch’s ratings are one level above junk status, with Moody’s two notches above.
 
Poor economic growth has stymied revenue collection, and there is no major turnaround imminent with the Treasury expecting growth of just 1.3 percent this year, well short of the government's target of 5 percent annual growth.
 
The rand briefly trimmed gains against the dollar, and was trading at 12.9675 at 1100 GMT after touching a session high of 12.9300 earlier.
 
"The decline was largely driven by lower production in mining and manufacturing. The primary sector is continuing to show a declining trend," said Michael Manamela, chief director for national accounts at Statistics South Africa.
 
The mining sector fell 11.5 percent in the quarter, while manufacturing was down 3.1 percent.
 
As well as struggling with a volatile political environment, South Africa has been plagued by falling commodity prices and a chronically high unemployment rate.
 
On a year-on-year basis, the economy grew at 0.7 percent in the fourth quarter, unchanged from the previous quarter.

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