Global financial crisis continues to bite: Busa

Tuesday, August 18, 2009

Johannesburg - The contraction of South Africa's Gross Domestic Product (GDP) by 3 percent for the second quarter of 2009, indicates the economy is still in recession, says Business Unity South Africa.

BUSA Deputy Chief Executive Officer Raymond Parsons said the figure released by Statistics South Africa this morning, showed that while the rate of negative growth in the economy has slowed, the country is still in a recession.

The country's GDP for the second quarter of the year contracted by 3 percent compared to a 6.4 percent contraction in the first quarter.

"Although the rate of the negative growth in the economy has slowed, the global crisis continues to bite deep in South Africa. The South African economy is lagging behind these international developments and hence the continued recession here," said Mr Parsons in a statement.

According to Busa, it remains essential for the country to pursue counter cyclical policies and other measures to soften the impact of the recession on growth and jobs as well as company liquidations.

"Busa hopes that the economy will bottom out by the end of 2009. the central challenge therefore remains to ensure the timely implementation of appropriate policies, including the possibility of yet another reduction in interest rates," he said