PRETORIA, June 5 (Reuters) – South Africa suffered its worst quarterly contraction in nine years, data showed on Tuesday, in a reminder to investors of the huge challenge President Cyril Ramaphosa faces to deliver long term economic growth.
After Jacob Zuma was forced out as leader by the ruling party in February, Ramaphosa pledged to clean up governance, deal with high unemployment and improve basic services, igniting a wave of optimism dubbed “Ramaphoria”.
South Africa’s economy has barely grown in the past decade with fiscal missteps and corruption contributing to weak business and consumer confidence.
However, the poor gross domestic output (GDP) in the first three months of 2018 will erode some of the enthusiasm in Africa’s most industrialised economy. The rand weakened by more than one percent against the dollar in response.
GDP contracted by 2.2 percent in the first quarter, led by a slowdown in agriculture and mining, after expanding 3.1 percent in the final quarter of last year, Statistics South Africa said. This was the largest quarter-on-quarter decline since the first quarter of 2009, when the economy contracted 6.1 percent, the agency said.