Economic Crisis: South Africa enters recession for first time since 2009
Gross domestic product in Africa’s most developed economy fell by 0.7% from April to June, the national statistics agency said in a report Tuesday, compared with expectations for 0.6% growth. That followed a 2.6% contraction in the previous quarter. These factors pushed the rainbow nation into economic recession- a first since 2009. The news underscores the fragility of South Africa’s economy at a time when the country has been dragged into the emerging market turmoil of the past month that engulfed Turkey and Argentina.
The South African rand, which has been under pressure throughout the last several months, extended losses following the report. The currency fell as much as 2.6% to 15.2268 against the dollar. Yields on rand-denominated government bonds spiked 22 basis points to 9.22%, the highest level since Ramaphosa was elected leader of the ruling African National Congress in December.
