Economists forecast GDP contraction of 0.2% for the fourth quarter of 2019
The persistence of load-shedding and the government’s failure to curb its debt and increase revenue have worsened concern that the economy could slide further. Picture: 123RF/ONYPIX
Stats SA is expected to release the GDP print for the fourth quarter of 2019 on Tuesday. A contraction of 0.2% is the median forecast among 12 economists polled by Bloomberg. The economy, which the Reserve Bank expects to have grown by only 0.4% in 2019, shrunk 0.6% in the third quarter, its second contraction in 2019. The most recent time SA entered a recession was in the second quarter of 2018.
“We expect those sectors that are inextricably linked to load-shedding — such as utilities, manufacturing and even transport via crucial supply chain networks — to underperform,” FNB economists said in a note. On the back of a grim domestic economy, conditions in the manufacturing sector are expected to have declined in February. The estimate among economists polled by Bloomberg is for the Absa manufacturing purchasing managers’ index to have declined to 45.1 index points in February from 45.2 in the previous month. This would make it the seventh consecutive decline.
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