South Africa’s mining and manufacturing sectors are predicted to be down for the first quarter of 2020 because of low demand from China.
On Monday, the Organisation for Economic Co-operation and Development announced that it is downgrading its 2020 global growth forecast from 2.9% to 2.4%, citing output contractions in China as the reason.in Hubei province in China and has since spread to 64 other countries.
“The adverse impact on confidence, financial markets, the travel sector and disruption to supply chains contributes to the downward revisions in all G20 economies in 2020, particularly ones strongly interconnected to China, such as Japan, Korea and Australia,” said the OECD. “Externally, the coronavirus outbreak, China growth concerns and general risk aversion have punished the rand,” said Lukman Otunuga, a senior research analyst at FXTM. He added that South Africa’s other domestic problems, such as the debt-burdened electricity utility Eskom and load-shedding, have also affected its general economic outlook.China is South Africa’s biggest trading partner. Last year, 12.1% of the country’s exports went to China, of which the bulk of the goods were commodities.
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