South Africa's economy shrinks amid election uncertainty

The South African economy shrank by 0.1 percent in the first quarter, figures showed Tuesday, days after the ruling ANC lost its parliamentary majority in a landmark election.

The January-to-March contraction follows a revised 0.3 percent expansion in the last three months of 2023, which, coming after another period of negative growth, narrowly avoided a recession, the national statistics agency StatsSA said.

"Weaker manufacturing, mining and construction drove much of the downward momentum on the production side of the economy, while the expenditure side witnessed a decline across all components," StatsSA said.

Mining output contracted by 2.3 percent, with platinum group metals, coal, gold and manganese ore the largest drags on growth, it added.

The construction industry was down 3.1 percent, while agriculture was the largest positive contributor recording a 13.5 percent expansion, "spurred on mainly by a buoyant horticulture sector that recorded a rise in the production of fruit."

Burdened by rolling power cuts and high unemployment, South Africa's stagnant economy was a key issue in last week's national vote.

The election saw the African National Congress winning only 40 percent of preferences, a catastrophic slump from the 57.5 percent it won in 2019.

The party is now in talks with other groups to secure enough parliamentary support to form a government and elect a president.