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S.Africa’s Q1 GDP declines by 2.3 percent

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South Africa’s Growth Domestic Product (GDP) contracted by 2.3 percent in the first quarter of 2020, said Statistician-General Risenga Maluleke on Tuesday.

According to Statistics South Africa (Stats SA), the GDP decline for the first quarter in 2020 marked the third quarter of decline in succession, following drops of 0.6 percent in 3rd quarter in 2019, and 1.4 percent in 4th quarter in 2019.

The report showed that the mining and manufacturing sectors were among those that contributed to the GDP decline. Other industries declined due to low demand.

“The electricity, gas and water industry contracted by 5.6 percent in the first quarter, largely due to decreases in electricity distributed and water consumption,” the report said, “The construction industry decreased by 4.7 percent. Decreases were reported for residential buildings, non-residential buildings and construction works.”

Jannie Rossouw, head of School of Economic and Business Sciences at the University of the Witwatersrand, told Xinhua that the decline would continue in the second quarter of the year as the impact of the lockdown was yet to be counted.

“The downward spiral trajectory as the effects of the lockdown will be considered in the next quarter. The second quarter will be much worse,” he said.

Labor federation Cosatu’s spokesperson Sizwe Pamla also said that the economy would continue declining.

“The Federation is not shocked at all by these numbers and we expect the situation to only get worse from here. These numbers have nothing to do with the outbreak of the COVID-19 virus,” he said.

He added that if the government failed to inject money, the economy would continue to be stagnant.

(XINHUA)

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