- South Africa's economic prospects are looking grim as the economy shrinks by 2% in the first quarter of 2020
- The information was revealed by the latest data from Statistics South Africa
- Banks and other experts have warned that the economic outlook is set to become worse in the coming months
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South Africa's economy decreased by 2.0% in the first quarter of 2020, Statistics South Africa reported on Tuesday morning.
According to Stats SA, Gross Domestic Product (GDP) growth for the first quarter of 2020 was recorded at -2%, marking the third quarter of decline in succession, following drops of 0.6% in the third quarter of 2019 and 1.4% in the fourth quarter of 2019.
The data, however, only reflects the first three months of 2020 before the nationwide Covid-19 lockdown was fully implemented on 27 March.
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The release of Stats SA's latest quarterly GDP figures comes a week after Minister of Finance Tito Mboweni tabled his Supplementary Budget in response to the Covid-19 pandemic.
Mboweni said Treasury now expects South Africa's GDP to contract by a record 7.2% in this year, while tax revenues are projected to fall R300 billion short of the what was estimated in February budget.
Briefly.co.za reported that as the economy continues to stagnate, South Africa's unemployment rate has risen to its highest in 10 years. The unemployment rate is now 30.1%.
The mining and quarrying industry decreased by 21.5% and contributed 1.7 percentage points to GDP decline. Decreased production was reported for iron ore, manganese ore other metallic minerals and chromium.
Globally, the Covid-19 has also threatened the economies of even the most developed countries, with the United Kingdom reporting a 2.2% contraction between January and March, the largest contraction for their economy in 40 years.
Banks, economists and government have all warned that South Africa will experience an unprecedented decline in GDP in 2020 as a result of the lockdown, with current projections ranging between a 5% and 10% decline.
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