‘SA is getting poorer’

While the effects of a technical recession, defined by overall GDP contraction, may not be immediately felt by the average consumer, per capita income GDP was a clearer indicator of whether consumers were getting richer or poorer, says economist Dawie Roodt. Per Capita GDP peaked in December 2011, at about $8 and last year in December it was at $6. “An equally valid measure of growth in the country besides GDP growth is per capita GDP, which has been averaging a decline over the last five years. “This means South Africans are getting poorer and poorer. “I think that definition is closer to the mark because it means that people can feel it and they are battling to make ends meet,” said Roodt. “Poverty is on the rise and yet the economy is growing.” “Last year, per capita GDP was a minus. In 2015, it was a minus and it was a plus, so we had three negative years in a row – and at the rate we are going there is going to be another significant drop.” Economist Dennis Dykes said in the South African context it is normally the SA Reserve Bank that would declare a recession using a different set of indicators to how markets would calculate it. “The market’s view of a recession, which is the popular view, is contraction of GDP growth over two consecutive quarters.”