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Q4 GDP down 1.3% q/q seasonally adjusted
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Analysts had predicted 0.4% contraction
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Seven out of 10 industries shrink
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Rand slips after data released
(Writes through)
By Bhargav Acharya and Anait Miridzhanian
PRETORIA, March 7 (Reuters) - South Africa's economy
contracted more than expected in the last quarter of 2022, as an
escalation in rolling power cuts contributed to most sectors
from agriculture to mining shrinking.
The data means South Africa could be heading for recession
and highlights the damage that the worst electricity outages on
record are doing to Africa's most industrialised economy.
It prompted the rand to extend losses against the
dollar.
South African President Cyril Ramaphosa on Monday appointed
a new electricity minister as part of a cabinet reshuffle that
he hopes will improve service delivery and shore up the
governing party's support ahead of a general election next year.
Figures from Statistics South Africa showed gross domestic
product contracted 1.3% in the fourth quarter compared to the
previous three months in seasonally-adjusted terms.
Analysts had predicted a 0.4% contraction in the
October-December period.
Statistics South Africa revised third quarter growth to 1.8%
quarter on quarter, from a previous estimate of 1.6%, but the
country will tip into recession - defined as two consecutive
quarters of falling GDP - if it contracts again in the current
quarter.
Seven of the 10 industries tracked by Statistics South
Africa shrank in October-December, with agricultural output
falling 3.3% quarter on quarter, mining 3.2%, finance 2.3%,
trade 2.1% and manufacturing 0.9%.
Struggling state electricity utility Eskom's scheduled power
cuts, caused by breakdowns at its ageing fleet of coal-fired
power plants, have meant up to 10 hours a day without power in
recent months, hurting businesses of all sizes.
After 2.0% economic growth for 2022 as a whole, South
Africa's economy is now 0.3% bigger than it was in 2019 before
the COVID-19 pandemic, Stats SA said, adding that the expansion
was smaller than a 3.5% rise in the country's population over
the same period.
Gross domestic product grew 0.9% year on year in the fourth
quarter, worse than forecasts for a 2.2% expansion.
(Reporting by Bhargav Acharya
Writing by Anait Miridzhanian
Editing by Alexander Winning and Susan Fenton)
