SA's economy shrinks amid election uncertainty

A vegetable street vendor pushes his cart outside of Luthuli House, the ANC headquarters in Johannesburg on June 4, 2024. Photo: AFP

A vegetable street vendor pushes his cart outside of Luthuli House, the ANC headquarters in Johannesburg on June 4, 2024. Photo: AFP

Published Jun 4, 2024

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The South African economy shrank by 0.1% in the first quarter, figures showed Tuesday, days after the ruling ANC lost its parliamentary majority in a landmark election.

The January-to-March contraction follows a revised 0.3% expansion in the Past three months of 2023, which, coming after another period of negative growth, narrowly avoided a recession, the national statistics agency StatsSA said.

"Weaker manufacturing, mining and construction drove much of the downward momentum on the production side of the economy, while the expenditure side witnessed a decline across all components," StatsSA said.

Mining output contracted by 2.3%, with platinum group metals, coal, gold and manganese ore the largest drags on growth, it added.

The construction industry was down 3.1%, while agriculture was the largest positive contributor recording a 13.5%expansion, "spurred on mainly by a buoyant horticulture sector that recorded a rise in the production of fruit."

Burdened by rolling power cuts and high unemployment, South Africa's stagnant economy was a key issue in last week's national vote.

The election saw the ANC winning only 40% of preferences, a catastrophic slump from the 57.5% it won in 2019.

The party is now in talks with other groups to secure enough parliamentary support to form a government and elect a president.

AFP