Economics
South Africa May Avert Recession If Power Cuts Are Kept at Bay
- First-quarter GDP drop compares with 1.6% contraction forecast
- Agriculture fell the most, dropping 13%; mining declined 11%
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South Africa’s economy, which contracted the most in a decade in the first quarter as the nation suffered the deepest power outages since 2008, may avert a recession if the electricity utility is able to keep the lights on through winter.
The wave of rolling blackouts from November through March were among the worst the country has yet experienced, causing manufacturing, mining and agriculture to lead an annualized 3.2% decline in gross domestic product, from a 1.4% expansion in the prior three months. While weak factory-sentiment data in the current quarter raises the risk that the economy may slip into the second recession in successive years, consistent power supply could see this avoided.