Ramaphosa not surprised by recession

President Cyril Ramaphosa says the recession comes as no surprise given the country’s numerous economic challenges.  He says Eskom’s electricity supply issues presented the biggest stumbling block for the economy.

Ramaphosa’s comments come on the back of figures released by Statistics South Africa which revealed that the country has fallen into a technical recession.

Stats SA figures have revealed that the Gross Domestic Product (GDP) decreased by 1.4% in the fourth quarter of 2019, following a contraction of 0.8% in the third quarter of 2019.

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South Africa’s economy slipped into its 3rd #recession since 1994 in Q4:2019, shrinking by 1,4%. This followed a contraction of 0,8% in Q3. #StatsSA #GDP #economy pic.twitter.com/BZDlddovOp

— Stats SA (@StatsSA) March 3, 2020

This is the second recession under Ramaphosa’s Presidency since 2018. Ramaphosa was addressing the South African National Editors Forum in Cape Town.

President @CyrilRamaphosa is this afternoon engaging with members of the South African National Editors’ Forum comprising of editors, senior journalists and journalism trainers from all areas of the South African media. #SANEF pic.twitter.com/5gonzJ5BFO

— PresidencyZA (@PresidencyZA) March 3, 2020

The President says, “Now the poor growth figures for the last quarter are not pleasing but at the same time they could not have come as a shock or a surprise because the signs were there.  And the drivers to this lack of growth and this technical recession that we’re in now, have been there for all of us to see. The load shedding and the impact that it has had on production both at the manufacturing level as well as with trade agriculture slumped down the greatest but I think more importantly, business and consumer confidence has been negatively affected as well.”

South African Institute of Race Relations’ Economist Ian Cruickshanks says crediting rating agency Moody’s did say that if the South African economy slips into recession it will be downgraded.

Moody’s is the only rating agency that has not lowered the country’s status to sub-investment grade.  Later this month Moody’s will release its latest assessment of the country.

In the video below Cruickshanks says South Africa must be prepared for a credit downgrade:

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