Even though the shrinking of the economy has slowed, agriculture, transport and trade have weighed down the country's ability to bounce back.
After a revised 2.6 percent contraction in the first quarter, the latest data piled pressure on Ramaphosa who has promised a "new dawn" after his predecessor Jacob Zuma's scandal-tainted nine-year reign.
The rand stretched losses against the dollar to more than 2% and government bonds fell after the data was released. That optimism has faded as structural reforms weren't implemented fast enough and global trade wars and turmoil in other emerging markets soured sentiment.
The biggest drags on economic growth were agriculture‚ forestry and fisheries‚ which decreased by 29.2% and detracted 0.8 percentage points from growth; and the transport‚ storage and communications industry‚ which decreased by 4.9% and accounted for 0.4 percentage points of the contraction.
"Despite this, it is somewhat positive to see that the mining, construction, electricity and financial industries all contributed positively to the economy over the past quarter, as these industries form the growth engines of the economy and hold the most potential for job creation", Ackerman said. However, Muscat says this growth is off a weak base. Meanwhile, a plan to redistribute land to address racial inequalities worries investors.
"Of great concern, however, is the fact that quarter-on-quarter, annualised household expenditure figures decreased 1.3%, reflecting the impact of the Value-Added Tax increase, significant fuel price increases, high unemployment and low growth on consumers' pockets".
"Clearly this is not what Ramaphosa would like running into the elections next year", he said. "Worse, it's going to take hard work to dig ourselves out of this situation while probably also facing heightened populist pressure heading into the election".
"Today's data will further dent hopes that Cyril Ramaphosa's presidency would lead to a marked turnaround in South Africa's economic fortunes", Tuvey wrote in a note.