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| Version 3 | Version 4 |
|---|---|
| South Africa goes into recession | South Africa goes into recession |
| (about 2 hours later) | |
| The South African economy has gone into recession for the first time since 1992, following a sharp slowdown in the manufacturing and mining sectors. | The South African economy has gone into recession for the first time since 1992, following a sharp slowdown in the manufacturing and mining sectors. |
| Africa's biggest economy contracted at an annualised rate of 6.4% between January and March, compared with the same period a year earlier. | Africa's biggest economy contracted at an annualised rate of 6.4% between January and March, compared with the same period a year earlier. |
| It was the biggest decline since 1984 and followed an annualised 1.8% fall in the previous three months. | It was the biggest decline since 1984 and followed an annualised 1.8% fall in the previous three months. |
| The construction sector, however, was boosted by the upcoming World Cup. | The construction sector, however, was boosted by the upcoming World Cup. |
| South Africa is benefiting from a huge programme of government investment ahead of the football tournament in 2010. | South Africa is benefiting from a huge programme of government investment ahead of the football tournament in 2010. |
| Rate cut expected | Rate cut expected |
| A recession is generally defined as being two quarters of negative growth. | A recession is generally defined as being two quarters of negative growth. |
| It is definitely going to make things tougher Johan Rossouw, Vector Securities and Derivatives | |
| "It's far worse than we expected," said Elna Moolman, economist at Barnard Jacobs Mellet. | "It's far worse than we expected," said Elna Moolman, economist at Barnard Jacobs Mellet. |
| "It confirms the recession in the economy and certainly increases concerns about overall growth for 2009, given such a bad start for the year." | "It confirms the recession in the economy and certainly increases concerns about overall growth for 2009, given such a bad start for the year." |
| The Reserve Bank of South Africa is due to announce its latest decision on interest rates on Thursday. | The Reserve Bank of South Africa is due to announce its latest decision on interest rates on Thursday. |
| It is now expected to cut rates by a full percentage point from the current level of 8.5%. | It is now expected to cut rates by a full percentage point from the current level of 8.5%. |
| It has started holding its meetings every month instead of every other month to allow it to act more quickly. | |
| The central bank has reduced rates from a level of 12% in December. | |
| Recovery predicted | |
| Statistics South Africa, which calculated the latest figures, said the slowdown in manufacturing and the mining and quarrying sector had been primarily responsible for the contraction. | |
| Mining firms have been hit by falling demand for their products as a result of the global economic slowdown. | Mining firms have been hit by falling demand for their products as a result of the global economic slowdown. |
| The government has predicted that there will be another quarter of negative growth to come before the economy recovers. | |
| "Looking ahead, we expect another quarterly contraction for the second quarter, but this is expected to be smaller," said National Treasury Director General Lesetja Kganyago. | |
| The weak economy presents particular problems for the new President Jacob Zuma, who has promised to create jobs and fight poverty. | |
| "It's easy to budget and make plans in a boom phase," said Johan Rossouw, chief economist at Vector Securities and Derivatives. | |
| "Now it's a different kettle of fish. It is definitely going to make things tougher." |