South Africa’s economy contracted in the third quarter, compounding the woes for Africa’s most industrial nation this year.
Gross domestic product in the continent’s second-biggest economy fell at an annualised rate of 0.6 per cent in the three months to the end of September, South Africa’s official statistics authority said on Tuesday.
Economists had expected a 0.1 per cent tick higher. The disappointing data weighed on the rand, which was recently down nearly 1 per cent against the US dollar.
Under President Cyril Ramaphosa, South Africa has battled to exit a long period of sluggish growth that set in under Jacob Zuma, his predecessor.
Delays in reforms to near-bankrupt state companies, infighting in the ruling African National Congress and worries about the rising levels of government debt have all sapped business confidence.
In the second quarter the economy had rebounded at a more than 3 per cent rate after contracting in 2019’s first three months, when rolling blackouts at the troubled electricity monopoly, Eskom, throttled industry.
But in the third quarter mining, farming, manufacturing and other mainstays of the economy all recorded sharp declines.
The return to contraction means that the economy is likely to mark another year of annual growth at or below one per cent, below the rate of population increase.
The South African Reserve Bank, which kept rates at 6.5 per cent last month, has forecast growth of 0.5 per cent this year.