South Africa has exited its first recession in eight years after the economy recorded 2.5 percent growth in the second quarter, official statistics released Tuesday showed. Statistics South Africa said gross domestic product (GDP) “increased by 2.5 percent in the second quarter of 2017, following a decrease of 0.6 percent in the first quarter of 2017.”
Africa’s most advanced economy, which entered a technical recession in March after two consecutive quarters of contraction, was lifted by 33.6 percent growth in agricultural output. “The industry’s increase was mainly as a result of increases in the production of field crops and horticultural products,” said an official statement.
The opposition Democratic Alliance party said the slight improvement provided “little hope” for millions of the unemployed, as low growth was forecast for this year.
“The economy, which is set to grow at just 0.5 percent this year, is growing too slowly to increase the level of per capita income for the 30.4 million people living below the poverty line,” it said.
South Africa’s economy has experienced sluggish growth in recent years with the jobless rate rising to 27.7 percent. Last month, official statistics revealed that more than half of the 56.5 million population were living in poverty, despite the government’s efforts to ease inequality.
In April, the country lost its investment grade credit rating when the world’s two major agencies, Fitch and Standard & Poor’s, downgraded its sovereign debt to junk status.
Their move was partly blamed on President Jacob Zuma’s sacking of respected finance minister Pravin Gordhan in March. The central bank has reduced its growth prediction for 2018 to 1.2 percent, down from 1.5 percent.