June 04, 2024.

For Creamer Media in Johannesburg, I’m Sashnee Moodley.

Making headlines:

GDP decreased by 0.1% in the first quarter

Treasury says fiscal stance is to stay balanced under coalition

And, Zambia asks for IMF loan to be increased to $1.7-billion

GDP decreased by 0.1% in the first quarter

Statistics South Africa has revealed that the country’s GDP decreased by 0.1% in the first quarter of this year.

The manufacturing industry decreased by 1.4% in the first quarter, contributing -0.2 of a percentage point to the negative GDP growth. Five of the ten manufacturing divisions reported negative growth rates in the first quarter.

The motor vehicles, parts and accessories and other transport equipment division and the basic iron and steel, non-ferrous metal products, metal products and machinery division made the largest negative contributions to the decrease in the first quarter.

The mining and quarrying industry decreased by 2.3% in the first quarter, contributing -0.1 of a percentage point. Decreased economic activities were reported for platinum group metals, coal, gold and manganese ore.

The construction industry decreased by 3.1% in the first quarter, contributing -0.1 of a percentage point. Decreases were reported for residential buildings and construction works.

Treasury says fiscal stance is to stay balanced under coalition

National Treasury intends to stick to a balanced fiscal stance under a coalition government, its director-general said on Tuesday, after the African National Congress lost its majority in last week's election.

Duncan Pieterse said Treasury’s fiscal strategy is achievable, even in a coalition environment, because it's quite balanced.

The ANC has up to two weeks to agree a coalition pact or another form of power-sharing arrangement with other political parties, after its share of the vote dropped below 50% for the first time in the post-apartheid era.

Pieterse said a balanced macro-fiscal stance becomes more defensible in an uncertain political environment and Treasury intends to continue managing the fiscal stance along those lines.

The ANC's potential partners diverge widely, from the free-marketeer Democratic Alliance to the more radical uMkhonto we Sizwe and the Economic Freedom Fighters, parties that advocate nationalising mines and banks and redistributing land.

Zambia asks for IMF loan to be increased to $1.7-billion

The International Monetary Fund said Zambia's government has asked for its $1.3-billion loan programme to be increased to $1.7-billion to help it respond to a severe drought.

The IMF also said in a statement that it had reached a staff-level agreement on the third review of the southern African country's Extended Credit Facility.

Once the latest review is approved by IMF's executive board at a meeting expected by the end of June, Zambia will have access to roughly $573-million, the fourth disbursement under the facility.

Zambia is one of a handful of African countries grappling with a drought induced by the El Niño weather phenomenon that has plunged parts of the region into hunger.

The copper-rich country is close to emerging from a debt-restructuring process beset by delays after more than three and a half years.

Zambia's finance ministry said last week that more than 90% of holders of its $3-billion in outstanding international bonds had accepted a restructuring proposal.

That’s a roundup of news making headlines today

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