Shocking GDP numbers as Eskom power cuts take massive toll

South Africa’s economy contracted the most in a decade in the first quarter as the nation suffered the deepest power outages since 2008. The rand dropped and banking shares slumped.

The annualised decline in GDP was 3.2% in the first quarter from a 1.4% expansion in the prior three months, Statistics South Africa said Tuesday. That compared to a median estimate for a contraction of 1.6%.

Manufacturing, mining and agriculture had the biggest contractions. Weak manufacturing data in the second three months raises the risk that the economy may slip into the second recession in successive years. That would stymie efforts to bring down the fiscal deficit and stabilise debt.

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