The shocking contraction of the country's economic growth of -3,2% for the first quarter of this year is much worse than the general expectations and it is the first clear indication that the economy will fall into a deep recession this year from which it will not easily recover again,” says Fanie Brink, an independent agricultural economist.
According to Statistics SA, the economic growth rate has been the weakest since the first quarter of 2009, when the country's economic growth has weakened by 6,1% mainly due to the pressure of the global financial crisis and poses a very serious threat to the development and prosperity for all the people and the country.
"The chances that growth for the first quarter of this year is likely to be the smallest quarterly contraction still to come should not be underestimated because the ANC government is still clinging to its socialist and communist policies which will finally destroy the economy and the country within the next 5 years,” according to Brink.
The biggest single problem with the economy in South Africa is the fact that the ANC government totally rejected capitalism after 1994 and embraced a mixed socialist and communist ideology that can only destroy economic growth. This was the starting point for the destruction of economic growth as clearly demonstrated over the past couple of years and the main reason why the government will not be able to rescue the weakening economy. In contrast, a market-oriented capitalist economic system is still the most successful economic system around the world today.
The redistribution of the country's assets, potential economic growth and prosperity will not solve the problems of inequality, poverty and unemployment, as it will only be a short-term solution until everything is consumed and digested, which will only increase these problems further.
"The general appeal to the Reserve Bank now to lower its lending rate to stimulate economic growth will make no difference to the economy because it is, together with the claims that its monetary policy can keep the inflation rate contained and protect the exchange rate, the single biggest delusion in economic science.
Hopefully, the president, Cyril Ramaphosa, will now also begin to understand that the agricultural industry, which performed the worst of all industries with a growth rate of -13.2% in the first quarter, cannot be the industry with the highest economic growth and higher employment expectations. There is also no possibility that the agricultural industry can create a million new jobs as suggested by the National Development Plan.
"The possibility that land expropriation without compensation will totally destroy the agricultural industry and the economy with a huge loss of employment is a very serious threat to the development and prosperity of the country and its people," Brink said.
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Bothaville
4 June 2019
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