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Economy nosedives in Q1, hurting rand

Manufacturing sector suffered during the quarter.

South Africa‘s economy nosedived 3.2% in the first quarter from the previous one as its manufacturing sector suffered, according to data that significantly lagged the 1.7% decline economists had expected and sent the rand sharply lower.

Year-on-year growth in Africa‘s most industrialised economy was zero compared with forecasts of growth of 0.7%.

“This was the largest economic contraction in almost a decade, … It was largely driven by manufacturing, then mining,” Statistician General Risenga Maluleke told a news conference.

Read: Rand slumps as worst GDP contraction since 2009 deepens gloom

At 0950 GMT, the rand was around 1.2% weaker against the dollar at 14.61.

The data will come as a shock to President Cyril Ramaphosa, returned to office after national elections in May with a pledge to revive growth and attract foreign investment.

Read: IMF urges SA to speed up reforms to boost growth

Ramaphosa’s reform drive faces formidable obstacles, including factional fighting within his governing African National Congress party, struggling state firms and weak consumer demand.

For 2019 as a whole the economy is expected to expand around 1%, versus growth of 0.8% last year, according to a Reuters poll.

That level of growth is insufficient to make a meaningful dent in poverty or reduce severe inequality, which persists in South Africa more than two decades after the end of white minority rule.

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What the economy did minus 3.2%, let’s go burn some trucks.

or some clinics, shops, farms, busses, etc etc etc….

This is terrible news. With population growth of over 1% this means GDP per capita fell last year-and this when the world was growing strongly and emerging markets more strongly! Now we are down 3,2% in the quarter-so getting even poorer!

Well-the majority of people voted for this!!

This country’s economy is getting smaller and smaller (while skilled persons of any color) search abroad for career development/employment.

SARS (i.e. Treasury) must also not forget to REDUCE THEIR TAX-COLLECTION TARGETS on annual basis, in line with this new smaller country, lovingly known as Mzansi.

In the same way proud Zimbabwe has now “progressed or transformed” itself to be the economic size-equivalent of greater Ethekwini/Durban.

Moody’s finger must be hovering over the downgrade instruction at this point.

Just as I thought. They tried to lie to us that there was some growth in 2018. There wasn’t.

Forecast for this year is 1%? Don’t think there is any chance of that happening now. Wonder what Moody’s might think of the number. If they keep us at investment grade how will they justify that? Surly they have a reputation and I believe a lot of institutions that follows their ratings might be frowning now.

They might also realize that its the same old people in government and they have been around for years. The new dawn is just an empty election promise.

Shocking news! What drove the contraction in agriculture? Was it EWC, land grabs, farm killings, drought, animal disease / plant sickness, conbination of all above? Loadshedding, WHAT? Because the contraction is mind-boggling.

In mining we all know the issues and Mantashe has the cheek to say workers must remain employed and the banks must bankroll the crippling mining companies – and Mantashe’s mining charter, of course, that’s now again being dragged to court to stop the minister’s excesses.
Ramaphosa should have brought Ramathlodi back as mines minister – he was far better than Mantashe.

Definitief droogte Louise. Ek is n boer. Wat my meer bekommer is die feit dat baie minder jong mense boerdery as toekoms sien. Ons is teen spoed oppad af.

“Ramaphosa’s reform drive”

What? Where?

“Consulting with alliance partners’ and getting stuck on a train doesn’t count.

He is the political equivalent of a person with locked in syndrome.

Yeah – look at what sectors grew … GOVERNMENT which is already an enormous drag on the economy and also Finacial services – those kind folks who are merrily scimming billions from everyone’s pockets via all sorts of fees etc. How are the “clever” economists so surprised ??

Ramaphosa is “playing the long game”, and he is playing this slow game on the rapidly-sinking Titanic.

Thank you to our revolutionary masters. Your transformation plans appear to be on track! Now, if you can just somehow convince everyone this is the fault of Apartheid, then you’re golden for the next 5 years! Hang on – you’re golden anyway.

The economy has been nose diving the past 5 + years, except for the essential services companies, but the real effects are worse than what is being published.

When you have social gathering with friends, how can we pretend that everything is great at home when things are not….

The news only shows the tip of the iceberg and not what is going on underneath.

Sadly the reality on the ground is massive destruction of good small companies built up over decades and these companies have unfortunately bled their cash out to the massive ANC Gov feeding monster…in the hopes of a turn around…The proposed turn around plan,(if there is one) is useless. For a R 50 Billion investment you could only feed 60 million people approx. R 69.44 per month for 12 months. How will R69/month/person boost the economy?

The underlying individual debt is running at max and I suspect that in the next months to come we will see the consumer stretched to the point that massive defaults on debt payments will occur.

There is no quick turnaround, there is no recovery path for all the companies that have already closed or liquidated. All the skills built over the past 25 + years have been lost when these companies closed.

Its a shame that right now, as I don’t believe that many South Africans can feel proud of the situation the Gov have put us in.

I hope the people will be strong enough to handle what may be confronting us next.

The economic policy stagnation is doing more damage to this country than State Capture did.

Name and shame the culprits in the trade unions, the socialists and the communists that are holding the country back and keeping the majority in poverty.

The ANC’s quest for unity is the cause of the stagnation in policy.

The question is, is this drop temporary or permanent?

You cannot grow an economy without energy (it’s impossible) and all that’s happened is that energy has just got more unaffordable.

Down goes the rand, up goes the petrol price. As for electricity; well in no time it’s going to unaffordable for everyone.

So there are strong indications that this is most likely permanent.

Facing this down is the ANC who are incapable, it seems, of any policy adjustments.

Instead what we are getting is SARS coming out with increased targets (read increased harrassment of taxpayers); a recommitment to social programs; no job cuts in SOE’s; and double inflation increases in administered prices and rates and taxes. Soon we will have EWC and, most likely, prescribed investments to add to the mix.

Somebody please, explain how these measures are going to turn this around. They’re not. A downgrade to junk looms and this will accelerate the decline.

We are in serious trouble and only the boldest reversal of all the ANC holds dear will have any hope of turning the tide.

What are the chances of that happening?

Beste Ryk,
Etlike dekades terug was die Nederlandse ekonomie buite beheer.
Navorsing het toe getoon dat die dwelm handel geldvoorraad en bates 7 keer groter was as die BNP van Nederland. Geen tradisionele montere geldvoorraad beheer maatreels nog minder fiskale reels het gegeld nie. Dit is slegs aangepas/toegepas per “bekende” aanwysers.

Wat is die waarskynlikheid dat die “biljoene” in kaping geld nou begin opdroog het ?

is die BBP nie ‘n aanduiding van ‘n reset vd ekonomie nie , “noudat dit gestop” is nie

Sien ons nie werklikheid nou eers nie ?

beste groete

gerhard

– 3, 2%! Funnily enough all those that said “it will get better soon” are eerily quiet now. What’s that? I don’t even hear crickets anymore? That’s because they have packed up and left as well…

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