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SA is in recession

After growth in the fouth quarter declined 1.4%
Biggest contributor was the transport, storage and communication industry. Image: Waldo Swiegers/Bloomberg

South Africa has officially entered recessionary territory as gross domestic product (GDP) numbers for quarter four of 2019 show that the economy shrank 1.4%.  

The fall means the country now finds itself in a technical recession which can be described as two consecutive quarters of negative growth after the economy declined by 0.8% in quarter three.

In total the economy in 2019 grew 0.2%.

The growth is less than the already lacklustre projections by the IMF, World Bank and Moody’s rating agency which said the economy would grow by 0.7%, the Reserve Bank’s 0.6% and National Treasury’s paltry 0.3% estimate.


The previous recession the country had was in the first half of 2018 largely attributed to the power cuts experienced due to Eskom.

Sectors by sector

Only three out of the ten production sectors contributed positively to the GDP with the largest negative contribution coming from the transport, storage and communication industry which decreased 7.2% contributing -0.6% of percentage growth.

The diminished economic activity was reported for land and air transport, as well as transport support services.

The second most notable dip is in the trade industry which contributed a 0.5% contraction to economic growth after decreasing by 3.8% due to a dip in economic activity in the wholesale and motor trade and accommodation.

Stats SA could not quantify the exact impact of load shedding but suggested that the power cuts experienced in the first two weeks of December had a marginal impact on the numbers and that the largest impact came from economic demand, said Joe De Beer, deputy director-general, Stats SA.

“We have had indications especially when you unpack the trade sector that the declines came from wholesale which is mostly linked to the drop that we see in imports,” he said.

“In the business services sector we still recorded positives which makes one think that load shedding might not have had such a big impact in this quarter,” De Beer said.

The expenditure figures also show the same recessionary pattern that was seen in the first half of 2018 as expenditure figures declined by 1.2% in quarter four after a 0.4% drop in quarter three.

Gross fixed capital formation showed the greatest dip of 10% and subtracted -2% to the expenditure side of GDP. The main contributors to the decrease were machinery and equipment, non-residential buildings and other assets. 

De Beer said investment in the economy has been “lagging overtime” where over the last five years or 20 quarters, there have only been six quarters of positive investment numbers. 

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Very disappointing and disturbing news.

During the hight of the 1930s depression, the USA had an unemployment rate of 25%. 60% of South Africans can not find jobs.

All SOEs and most municipalities are bankrupt. Industries from agriculture to mining and banking a laying off workers. These industries are trying to survive and have to lay off their own workers. Then the state expects them to fund the jobs and salaries at municipalities.
These jobs at the municipalities, SOEs and government departments are not viable. The institutions, businesses and individuals who have to fund those salaries at state institutions are not economically viable themselves.

And you tell me that this is a recession? I don’t want to see the depression then!

The IMF is not interested in bailing out the ANC. That is why the ANC is looking at the pension funds now. If you run out of cash flow, you have to liquidate assets. Whose assets will be liquidated by the ANC? They haven’t got any equity left in the government, that is why they are turning to us now.

Agreed Sensei, we’re in a depression. Once they hit the GEPF, PIC and private pension funds, then we’ll move swiftly from depression to psychosis

I think the time has passed for you to be disappointed, you should expect this.

Speaking under correction but I think Anthea Jeffery from the IRR actually did an impact study on BEE over time as part of one of her books.
Not quite the way you framed the question but ja, results are basically destructive

Why was my post deleted when i was telling it the way it is?

I had a few also deleted this morning..

looks like some at MW don’t like the truth

That’s why I dont even bother commenting any more. MW deletes posts that are deemed too truthful.

“Rainbow” nation experiment not working out?

And this weekend the ANC and their alliance partners will have a legotla to confirm they are on the right path. The socialist/communist/unionist Path.


With lots of booze and braaiing meat ….

They wouldn’t know the right path if it knocked on the front door, or bit them in the backside.

The solution to this problem is obvious. Close StatsSA. I am sure its one of the solutions that will be put forward.


Ship SA has let out its anchor!

In reality, SA has been (effectively) in a recession for the past 2 years at least (you can see and feel it around you & in the financial media. For a long time now.)

Now we have to try and avoid a Great Depression!!
Come to think of it, SA’ official unemployment rate is HIGHER than it was in the 1930’s great depression in the US (which peaked at 25%)….so in a way, we’ve been in a Depression also for a long time (that is compared to western standards).
Compared to African continental standards, we’re doing extremely well…there’s electricity & water for most of the day, and shop shelves are stocked.

Don’t worry, SARS will always manage to collect a certain % reported increase in revenue during the next cycle.

What you neglect to mention Michael is the inevitable that is happening. We’re going South faster than a spinning wheel with no brakes

Without money, our comrades are dead set to introduce the NHI. How ludicrous is this?

It tells me they have a hidden agenda!

Will someone please tell me how 3 million tax payers can subsidize a population of 55 million when our hard earned taxes already bail out all the insolvent SOE’s? Where’s the money going to come from to plug a hole in a sick heart when these thugs cannot even plug a hole in the road?

Then we have property insecurity looming!

The EWC will be the final nail in the coffin

Ask our friends who live North of us.
They to believed they’re doing well:

to quote you

“to African continental standards, we’re doing extremely well…there’s electricity & water for most of the day, and shop shelves are stocked.”

Today 90% of Zimbabweans are unemployed, the Elite Politicians live in the lap of luxury, inflation is off the scale, supermarket shelves are empty ,no gasoline, they do not have electricity, but at least they can mix some Oros with the little water they have left

There’s an Afrikaans adage that reads:

“Daar is geen salf meer te smeer”


For sure. And to add: remember, SA is still financially well off….we have “very deep capital markets”. What does it mean? ….i.e. we have R4-5trillion in pension funds that will (soon) be prescribed to.

LOTS of money in SA pensions (govt & private) to help fund the artificial AA/BEE social project (with which no country can survive from economically) to carry the cost further down the decade.

These are what my crystal ball is telling me:

1. Once insufficient tax revenue can be collected (we may’ve breached this point) to cover state expenses, then..
2…it will slowly move over to stepped increases to “prescribed assets” on pensions (I fear it WILL happen….there is no other way this useless ANC govt will get out of the debt pit. Just pushing the fiscal cliff forward.)
3. Once most pensions are depleted (after a decade or longer(?)…remember SA is a big ship to sink compared to Zim), the credit/bond defaults will start. (….still no IMF in sight at this point)
4. Defaults will result in intl credit drying up (except maybe China, that could “buy” our harbours from us in their strategic quest to control world trading points)
5. Then govt will start printing ZAR like stink (a la Zim or Venez.) to pay for debt. Inflation shoot up & interest rates.
6. A Saffa that has 1 USD in their pocket is considered wealthy.
7. When there is no money to pay SASSA grants, “the people” threaten to lift the ANC from power / real anarchy ensues.
8. Once there is nothing left, and by that time no-one really cares (most have either passed on or emigrated) the ANC, still clinging to power, will ask the IMF for help.

Very easy to predict. All African govts goes the same route post colonialism. My “crystal ball” tells it. When I turn it upside down, there’s a “made in Zimbabwe” sticker to the bottom of it…I know it works.

What would SA’s negative growth would’ve been over same cycle, if it wasn’t for the stellar performance of the PGM-basket?

3% or 5% down?

Thank you cANCer… If the government implements land expropriation without compensation economic growth will never return to South Africa in the next +/- 20 years…

EWC will obliterate the economy! Just the threat of EWC has done incredible damage.

Not to mention the great NHI coming our way.

thanks to our government,Zim nr 2

Well at least something CR gets right. Recession. Almost without fail.

Should the well respected “self made billionaire” African Leader (Hahahaaa) want to know how to fix it? Easy. Do the opposite of what you have been doing and talking about.

Start by NOT getting caught with BOSASSA money and then lie about it.

Proudly brought to you by the ANC….

It was anticipated by most businesses. Except for those who were trying to safe guard their share prices. The question now is :What exactly is our president and his so called “6 ” planning to resolve this massive tsunami in South Africa ?

Besides looting, Nothing.

Wrong !!!

South Africa is in the first stage of a terminal DEPRESSION !!!!

It was to be expected, as it’s not exactly a hive of ‘productivity’ out there. People find it easier and more effective to protest or take by force, than to earn their own ambitions. There’s also no incentive to work when everything is promised to come for free.
Invariably, all this supposed freedom, will one day leave everyone just, “dom”!

1st quarter of 2020, is likely to be even worse, with the global fallout of the coronavirus to add to our woes.

This government has no clue how to run a country. Nothing in this country works. Integrity, work ethic and honesty are non existent.

And we still have people here on Moneyweb, telling all, to go long on the JSE. How does that song go…… It comes tumbling down. Rand included.

It’s the old adage Garbage in Garbage out. Congratulations to the ANC and their “on the job” training policies. Really helping the poor now.The more poor people you have the more people you can help

I still think that they are lying that we had 0.2% growth in the last Q 2019.

The correlation with ANC corruption and policy is there.


Out of interest has anyone quantified the inflation impact of BEE on the economy?

I can only imagine that it is massive and is probably one of the main contributors to the stalling of the economy (Even Eskom with its BEE requirements to build Mdupi etc), but further the massive burden on small and medium companies, black and white owned.

How do you compete internationally when you have to cost in at minimum a 30% premium in addition to our restrictive labour laws and high tax rates.

I would think a study over time on the impact of BEE would show it is a significant contributor to inflation and the inability to compete as an economy

And yet RamaSquirrel and co will simply down on the very policies that are causing this.
And keep insisting how they are going to try in new investment when every shred if evidence continually keeps proving they are doing the exact opposite.
Forget the Aloe ferox. Lets rather adopt the Ostrich as national symbol for govt

1. Good news is Bosasa ie Bidvest posted impressive results.

2. CR17.R1bn later…well you get what you deserve.

Spelling error : SA is a receskom, not a recession

After all is said, let’s not forget the next ace up the comrades’sleeves – a huge bail out from China, with loud applause and confirmation from grassroots comrades – whilst effectively selling SA Inc to the Chinese.
All big infrastructure projects and reviving Transnet, etc will be allocated to China. And China will ship a 150 000 rural, poor Chinese to S.A. to work these projects and to start up non tax-paying China shops. Non of these Chinese or their many off-springs will ever leave S.A. again and over time they will control government capital projects and get a firm grip on economic activity in S.A. They already enjoy BEE royal status in S.A.

Here’s the trick. Our economy is dependent on the growth of the world economy and our ability to compete in it.

Part of this competition is the competition for global investment, and this is driven by our broad economic policies including BEE, EWC, NHS, ease of tourism, the cost and availability of energy, willingness to import skills, etc.

Where we underperform our global competition it’s crystal clear that our policies are failing and this is where our government lacks the cognitive skills to realise this, and the political will to correct it.

Instead we tweak at the edges (a slow trimming of the public sector over a period of years) instead of tackling the rot at the core.

And this is really not difficult when you realise that it doesn’t even require that we do anything. We just have to stop doing things.

We have to stop appointing incompetent people to top jobs, stop red tape, and drop job killers like BEE, EWC, and the fantasy of the NHS.

That we can’t see what’s clearly in front of our faces is testament to either a lack of intellect or emotional baggage from the past.

The DA is at least righting its ship and now offers true hope for a solution. Our only hope is that the electorate can reach the same conclusions.

What must not be forgetting is that two-thirds of the ANC alliance, namely COSATU and the SACP, are very happy with things the way they are.

End of comments.





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