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Thu, Mar

South African Rand Weakens As The Country Fell Into Its Third Recession Since 1994

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South African rand has weakened and the country has slipped into its second recession in two years and third since the end of the 1994 apartheid. South Africa statistics bureau disclosed on Tuesday that the GDP fell by 1.4 per cent in the quarter, after dropping by 0.8 per cent in the previous three months, while the rand was 0.55% weaker at 15.4700 per dollar, after hitting a session low of 15.6250.

The recession has taken South Africa's growth for 2019 to just 0.2 per cent which is the lowest reading since the global financial crisis in 2009. The weakness in the economy and currency has mounted more pressure on the president, Cyril Ramaphosa who has been struggling to keep his election promise towards reviving the economic activity of the country.

Drought and floods in some part of the country have weakened agriculture output. Power station output has been low, so is gas and water supplies. Construction, mining and manufacturing, which outweighed positive contributions from finance and government spending.

The International Monetary Fund last year urged more "decisive" reforms to boost private investment in South Africa, forecasting economic growth to remain sluggish for a sixth consecutive year in 2020.

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