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06/05/2018 | 05:51am EDTScivolone del Rand. (?)
JOHANNESBURG--The South African economy shrank 2.2% in the first three months of the year, the national statistics office said Tuesday, following a weak performance in agriculture, mining and manufacturing.
The annualized first-quarter reading contrast the strong performance by Africa's most developed economy in the fourth quarter of 2017, when gross domestic product grew 3.1%.
The national statistics office said that for the first quarter, "the main positive contributions came from finance, real estate and business services and government."
The South African Reserve Bank had warned last month that the economy might have contracted slightly in the first quarter, but said it still expects GDP to expand 1.7% this year, up from 1.3% last year.
The first-quarter result likely puts a damper on "Ramaphoria," or the enthusiasm among many investors and economists following the February resignation of South African president Jacob Zuma and the election of Cyril Ramaphosa as his successor.
Despite an upsurge in consumer and business confidence in the first quarter, more profound weaknesses in South Africa's economy will take longer to shed. The unemployment rate still stands at 26.7% and South Africa's treasury has warned that it will struggle to reach its tax revenue targets for the year ending March 31.