SA has descended into recession for the first time since the 2008-09 financial crisis, with economic growth in the red for the second quarter running despite turnarounds in agriculture and mining.
The latest shock growth figures, which were much worse than the market had expected, could increase the risk of further rating downgrades and dent already weak investor and consumer confidence levels.
This will also make it more difficult for Finance Minister Malusi Gigaba to deliver on his promises of fiscal consolidation when he presents his mid-term budget review in October.
The rand recovered some of its intraday losses by late Tuesday to trade 1% down at R12.81/$, following the release by Statistics SA of GDP figures that showed the economy contracted 0.7% in the first quarter, following the 0.3% decline in the fourth quarter of 2016.
If you are already a subscriber, please click on the following link below to go to the full article: Recession may prompt further downgrades
If you would like to subscribe to BusinessLIVE Premium to read the full story, please click here: Subscribe
Premium content is not yet available on the app. Please use the desktop site to subscribe.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.