South Africa's economy in recession

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South Africa's economy is in recession for the first time since 2009 following two consecutive quarters of negative GDP growth.

At the beginning of the year, South Africa's economy fell at a staggering 2.6 per cent annual rate - a figure that was revised from a 2.2 percent fall.

The rand stretched losses against the dollar to more than 2% and government bonds fell after the data was released. The economy grew 0.4% from a year earlier.

The economy contracted by an annualised 0.7 per cent in the second quarter, a much worse reading than the 0.6 per cent rise forecast by economists.

Mining, construction, electricity, finance and personal services experienced positive growth, but not enough to lift overall economic growth out of negative territory.

The president took over the ANC when the ruling party's support had slipped into a record low of 54.4% in the 2016 municipal elections which led to the ruling party losing control of Johannesburg to a coalition.

"It probably means that President Ramaphosa's task of turning this ship around is even harder than it was in the beginning of the year", said Pienaar.

Maimane said SA was getting "poorer and poorer" under the ANC, with record high levels of unemployment, the Value-Added Tax increase and rising fuel costs all engulfing South Africans this year.

The GDP figures could also draw the attention of ratings agencies, who have South Africa's sovereign ratings near "junk" status. "We've had the emerging markets crises like in Argentina", he said of the country, whose Peso collapsed and has announced austerity measures.

With unemployment already at a 15 year high, according to BusinessLIVE, the recession would not be helping the situation at all.

Citadel's Ackerman however, said it would be wrong to lay the blame for poor economic performance on Ramaphosa "as it remains a legacy of ten years of economic mismanagement".

"Vasili Girasis, market trader at BP Bernstein said: "(There is) a lot of pressure on banks and retailers, as expected with such a weak rand.

South Africa's president, Cyril Ramaphosa has made wooing foreign and domestic money a cornerstone of his economic reform agenda, so the investment numbers will come as a big disappointment.

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