South Africa’s economy has slipped back into recession for the second time in a decade. The news comes not long after two ratings agencies downgraded a portion of the country’s sovereign debt to so-called junk status.
Analysts had expected a better performance. They predicted a slight expansion of South Africa’s economy. But in the event, it shrank by 0.7% in the first quarter of this year, following on from a fall at the end of last year.
While there were encouraging signs from South Africa’s mining industry, the main sector that pulled back the GDP figures was manufacturing, which shrank by nearly 4% in the second quarter.
The South African currency, the rand, fell around one percent.