South Africa’s economy shrank in the first quarter of the year, in the worst performance since the global recession five years ago, official data showed Tuesday.
Statistics reported that the economy contracted by 0.6 per cent, a stunning reversal for Africa’s most advanced economy amid a rapid boom elsewhere in the continent.
The worse-than-expected data comes during the first full day on the job for South African Finance minister Nhlanhla Nene. The 55-year-old was sworn in as South Africa’s first black Finance chief Monday.
The contraction was blamed on a slump in mining due to a strike now in its fifth month, and a significant drop in manufacturing.
“This makes for grim reading,” said Razia Khan, Africa’s regional head of research for Standard Chartered Bank.
“Mining, hit by protracted industrial unrest, fell almost 25 per cent on an annualised basis. Manufacturing was down 4.4 per cent.”
Shortly after the news, the rand fell almost one per cent against the dollar, which was much worse than economists had predicted.
In the last quarter of 2013 the economy grew 3.8 per cent.