There had been questions asked over the last couple of months with regards to the state of the South Africa economy, with some saying that South Africa is not in a recession like other countries in the world. But today, the truth we revealed: South Africa is officially in a recession.
South Africa sank into its first official recession in 17 years in the first quarter of 2009, with a huge 6.4% collapse in gross domestic product (GDP). The drop in GDP in the first quarter follows a fall of 1.8% in the fourth quarter of 2008. A recession is defined as two consecutive quarters of declining GDP.
What this simply means is that times are going to be tougher for us now in South Africa. With the economy not growing, you can expect further job cuts, therefore if you do have a job, it would be a good idea to try keep it! One has to also look at their spending now. Gone are the days on splashing out on luxury goods. In the famous words of Reserve Bank governor, Tito Mboweni, “It is time to tighten your belts!”
Economists predict that this slump will not last long with some going as far as saying the South Africa economy will start to grow again as early as the third quarter of this year. But for now we have to bare the brunt of a recession!
