afrol News, 26 May - South Africa is officially in a recession, the state economic arms have declared, though a slight improvement is expected in the second part of the current year.

According to figures released by Statistics South Africa today, the Southern African economic giant in the first quarter of 2009 experienced a contracted Gross Domestic Product by an annualised 6.4 percent, the second in a row, and technically throwing the country into its first recession since more than 15 years ago.

"This is the first instance of two consecutive quarters of negative growth since the fourth quarter of 1992," said Statistics SA said in a statement.

The announcement has preceded another major one expected in two days time, when the country's Monetary Policy Committee (MPC) will also be making an announcement on interest rates. The committee has already cut rates four times since December.

With the mining and manufacturing sectors the main culprits, Statistics SA is however optimistic that worst could be over, with a slight further contraction in the next quarter and an improvement in the second half of the year.

The Director General in the National Treasury, Lesetja Kganyago was later today quoted in the media saying that the economy was expected to contract further before growing again in the second half of this year.

"We expect another quarterly contraction for the second quarter, but this is expected to be smaller. However, the economy is expected to improve in the final two quarters of this year," said Mr Kganyago though he did not say which sectors would contribute the most to the upturn of the economy.

By staff writer

© afrol News

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