South Africa hit by recession for the first time in 17 years

For the first time in 17 years, Africa's biggest economy has entered a recession. South Africa's gross domestic product fell 6.4% in the first quarter after shrinking 1.8% in the last quarter of 2008.South Africa entered its first recession since apartheid as the global crisis pounded demand for its main exports, leaving growth down 6.4 percent in the first quarter, the government said Tuesday.The market had expected a drop, but the showing was far worse than most forecasts, adding to pressure on new President Jacob Zuma, who took office just two weeks ago promising to create jobs and fight poverty."The world deteriorated beyond expectations ... (As we are) very dependent on foreign trade there was no way we were going to escape from that," said Johan Rossouw, chief economist at Vector Securities and Derivatives.Seasonally adjusted real GDP for the first quarter of 2009 decreased by an annualised rate of 6.4 percent compared with the fourth quarter of 2008, said the Statistics SA, the government's compiler.The economy had contracted by 1.8 percent in the last quarter of 2008. The two consecutive quarterly contractions put South Africa in its first recession in 17 years.The main drags on the economy were manufacturing, down 3.3 percentage points, and mining, down 1.7 percentage points, the agency said.The unadjusted real GDP for the first quarter was down 1.3 percent compared with the same period last year. "They are really horrible numbers and do demonstrate that the economy actually weakened a lot more than had been anticipated in the first quarter," Dennis Dykes, chief economist at Nedbank, told 702 Talk Radio.