South africa hit by second recession in 8 years

Yes, South Africa has indeed been hit by a second recession in just 8 years. The country's economy contracted by 0.7% in the first quarter of 2020, marking the second recession in a decade.

The first recession occurred in 2015-2016, when the country's economy contracted by 0.8% due to a combination of factors including a decline in commodity prices, a drought, and a credit rating downgrade.

The current recession is attributed to a range of factors, including:

  1. Weak global demand: The COVID-19 pandemic has led to a significant decline in global trade, which has negatively impacted South Africa's exports.
  2. Lockdown measures: The government's lockdown measures to combat the spread of COVID-19 have disrupted economic activity, particularly in the tourism and hospitality sectors.
  3. Eskom's power outages: The state-owned power utility company, Eskom, has been experiencing frequent power outages, which has led to a decline in economic activity and a rise in costs for businesses.
  4. Political uncertainty: The country has been plagued by political uncertainty, including the ongoing debate over land expropriation without compensation and the leadership crisis in the ruling African National Congress (ANC).
  5. Structural issues: South Africa's economy has been facing structural issues, including high unemployment, low economic growth, and a large trade deficit.

The recession has had significant implications for the country's economy, including:

  1. Job losses: The recession has led to job losses, particularly in the formal sector.
  2. Increased poverty and inequality: The recession has exacerbated poverty and inequality, with the poorest households being disproportionately affected.
  3. Reduced government revenue: The recession has reduced government revenue, making it challenging for the government to fund its social and economic programs.
  4. Increased debt: The recession has increased the country's debt burden, making it challenging for the government to service its debt.

To address the recession, the government has implemented a range of measures, including:

  1. Fiscal stimulus package: The government has implemented a fiscal stimulus package aimed at stimulating economic growth and creating jobs.
  2. Monetary policy: The South African Reserve Bank has implemented monetary policy measures, including interest rate cuts, to stimulate economic growth.
  3. Structural reforms: The government has announced plans to implement structural reforms aimed at improving the business environment and increasing economic competitiveness.
  4. Investment in infrastructure: The government has announced plans to invest in infrastructure, including roads, ports, and energy, to improve the country's economic competitiveness.

Overall, the recession has presented significant challenges for South Africa's economy, but the government and private sector are working together to address the challenges and stimulate economic growth.