South Africa back in recession

What you need to know:

  • Economy shrank by 0.7 per cent in the first quarter of this year, following on from a fall at the end of last year.

South Africa's economy has slipped back into recession for the second time in a decade.

The news comes not long after two ratings agencies downgraded a portion of the country's sovereign debt to so-called junk status.

Analysts had expected a better performance. They predicted a slight expansion of South Africa's economy.

But in the event, it shrank by 0.7 per cent in the first quarter of this year, following on from a fall at the end of last year.

While there were encouraging signs from South Africa's mining industry, the main sector that pulled back the GDP figures was manufacturing, which shrank by nearly 4 per cent in the second quarter.

The South African currency, the rand, fell around one per cent on the news.