Capital investment slumps 4.5% in first quarter

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Gross fixed capital formation fell for a fifth consecutive quarter in the first three months of 2019, although public-sector spending picked up

Gross fixed capital formation fell 4.5% in the first quarter of 2019 from the prior three months, the Reserve Bank said on Thursday, marking the fifth-consecutive quarter of declines.

Gross fixed capital formation is a measure of new investments into an economy, stripping out expenditure to replace depreciating assets.The improvement in public-sector spending came off a low base, however, and was due to a strong investment drive by state-owned companies, despite financial and governance challenges, the bulletin read.

SA's economy contracted a shock 3.2% in the first quarter compared to the last quarter of 2018, with the Reserve Bank's bulletin showing that this was largely due to a sharp decrease in exports.

 

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