A recession is a term used to describe a period of economic decline. It is typically defined as two consecutive quarters of negative economic growth. South Africa is currently in the midst of a recession, with the economy contracting by 0.6% in the first quarter of 2021 This is the first time the country has experienced a recession since 2009. The main drivers of the current downturn are weak global demand, low commodity prices, and domestic political uncertainty. The impact of the recession has been felt across the economy, with businesses and households alike feeling the pinch. Unemployment has risen to 26%, while consumer confidence is at its lowest level in a decade. The recession is expected to continue into 2023.
What causes a recession?
A recession is typically defined as two consecutive quarters of negative economic growth, as measured by a country’s gross domestic product (GDP). South Africa’s last recession was in 2009 when the country’s GDP shrank by 1.8%.
There are many factors that can cause a recession, including a slowdown in global trade, a rise in interest rates, and a decrease in consumer confidence. In South Africa, the main cause of the 2009 recession was the global financial crisis, which led to a decrease in demand for the country’s exports.
While a recession can have negative effects on a country’s economy, it can also present opportunities for businesses and individuals to make investments at lower prices. .
How is the current recession in South Africa affecting the people?
The current recession in South Africa is affecting people in several ways. First, it is causing an increase in the cost of living as prices for basic goods and services to continue to rise. This is putting a strain on household budgets and making it difficult for people to make ends meet. Second, the recession is leading to job losses as businesses are forced to downsize or close their doors altogether. This is leaving many people without an income and struggling to support themselves and their families. Finally, the recession is also causing a decrease in the value of the South African rand, which is making it harder for people to save or invest their money.
