Not Exactly Unexpected

Farmers are taking fewer risks.
Farmers are taking fewer risks.

South Africa slid into an official recession Tuesday, as second-quarter growth domestic product (GDP) figures showed a contraction of 0.7% — the second straight quarter of decline. First-quarter figures were revised down, from -2.2% to -2.6%.

The main culprit, according to South Africa’s Business Day, was a sharp contraction in the agricultural sector, which has been under political assault this year as the ruling African National Congress has pledged “expropriation without compensation.”

The Business Day described the “shocking drop in agriculture,” which single-handedly tipped the economy into recession:

Most analysts had expected a moderate increase in GDP.

But the most shocking number in the statistics is the precipitous 29.2% decline in agricultural production over the second quarter.

Statistics SA said: “The decrease was mainly because of a drop in the production of field crops and horticultural products”.

The agriculture “detracted a significant 0.8% from the headline outcome”, Investec said.

The recession is not quite “shocking” to opponents of the South African government’s land reform policy, which is ostensibly aimed at redressing racial inequalities in land ownership, but which critics have called a threat to property rights in general.

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See Also:

(1) South Africa’s biggest weakness – and what you can expect for the rest of 2018

(2) South Africa Recession: Country faces economy turmoil as rand continues to plummet

(3) Farmers’ Group, Unions Blast South African Land Seizure Plan

(4) Number of South Africans selling homes and emigrating hits eight-year high

(5) South Africa Will Go the Way of Zimbabwe If It Doesn’t Change Course

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