South Africa's economy contracts most in nine years on mines

(Bloomberg) — South Africa’s economy contracted the most in nine years in the first quarter of 2018 as mining and factory output fell.

Gross domestic product shrank an annualized 2.2 percent in the first quarter of the year compared with the prior three months, Statistics South Africa said in a report released Tuesday in the capital, Pretoria. However, when measured against the first quarter of 2017, the economy expanded 0.8 percent.

President Cyril Ramaphosa’s rise to power since December initially boosted sentiment and the rand following former leader Jacob Zuma’s scandal-ridden tenure of almost nine years, but confidence indexes have now returned to levels they were at late last year as businesses seek real reforms.

The South African Reserve Bank forecasts the economy will expand 1.7 percent this year in 2019 and 2 percent in 2020.

(Written by Ntando Thukwana and Odwa Mjo)