One of the worst kept secrets in South Africa was today laid bare after Statistics South Africa confirmed that South Africa’s economy has entered a recession following poor electricity supply in the fourth quarter of 2019.
The local gross domestic product (GDP) contracted by 1.4% during the last three months of last year, following a 0.8% decline in the third quarter and reaffirming the dire state of the local economy.
The widespread loadshedding episodes affected severely seven out of ten industries, namely transport, storage & communication trade, catering & accommodation, construction, utilities, manufacturing, agriculture, forestry & fishing and government services.
Bianca Botes, Treasury Partner at Peregrine Treasury Solutions, said: “While a contraction was largely expected, the decline exceeded market expectations, demonstrating how extensively the electricity crises in South Africa continues to plague the economic prospects of the country”
Eskom has already warned South Africans to expect power cuts for the next 18 months as it works to stabilize its operations.
By Kabelo Khumalo
By Kabelo Khumalo
