EFF STATEMENT 2018 FIRST QUARTER ECONOMIC DECLINE
Wednesday, June 6, 2018
The EFF notes the first quarter economic decline by 2.2% on a quarter-on-quarter basis compared to the much celebrated 3.1% growth in the fourth quarter of 2017 as reported by Stats SA. Majority of the sectors i.e. agriculture, mining, manufacturing, construction and trade have recorded a negative growth.
The EFF warned against a misleading campaign to celebrate 2017 fourth quarter growth, which was paraded by the media and the ruling party as a sign that the economy is recovering. The reality is that, economically, the fourth quarter of every year where there is good rain, agriculture will perform well. It was its strong performance that helped keep the economy afloat, because trade and other services tend to do well in December when consumers spend their hard earned cash. Thus, it is normal in each year.
However, the reality is, there has not been any change in the fundamentals of South Africa’s economy. In fact all indications are pointing to a downward spiral into further crisis. The first quarter decline in the economy is a true and clear indication of where the economy is going; possibly towards recording negative growth as it was the case last year.
Earlier in the year, the budget was presented with a shocking revenue collection of more than R40 billion and the Treasury has failed to demonstrate how and where the money is going to come from. Instead, it is workers, the poor and unemployed and people living with disability who are at the receiving end of the economic crisis and poor performance by this government. The price of food has increase drastically since the misguided increase on VAT to 15% in April.