South Africa’s GDP contracts in the third quarter

StatsSA has published South Africa’s Gross Domestic Product (GDP) data for the third quarter of 2019, showing that growth contracted by 0.6%.

Unadjusted real GDP growth in the third quarter was 0.1% year-on-year, the stats body said, while unadjusted real GDP growth for the first nine months of the year was 0.3% year-on-year.

StatsSA said that the largest negative contributors to growth in GDP in the third quarter were the mining and quarrying industry which decreased by 6.1% and contributed -0.5 percentage point to GDP growth.

The manufacturing industry decreased by 3.9% and also contributed -0.5 percentage point to GDP growth.

Transport storage and communication industry decreased by 5.4% and contributed -0.5 percentage point to GDP growth.

By comparison, the trade, catering and accommodation industry increased by 2.6% and contributed 0.4 percentage point to the GDP growth.

Finance, real estate and business services also increased by 1.6%, contributing 0.3 of a percentage point to GDP growth.

The rand lost ground against the major currencies in mid-day trade:

  • Dollar/Rand: R14.64 (0.64%)
  • Pound/Rand: R19.00 (0.90%)
  • Euro/Rand: R16.22 (0.65%)

Nominal GDP was estimated at R1.29 trillion in Q3: 2019, up by R31 billion from Q2: 2019.

  • Mining was up by R11 billion to R101 billion;
  • Manufacturing was up by R8 billion to R153 billion;
  • Electricity, gas and water was down by R5 billion to R46 billion;
  • Agriculture was down by R7 billion to R29 billion.

Little hope

StatsSA showed a higher-than-expected GDP figure of 3.1% (seasonally adjusted, annualised) for Q2 2019, while annual growth also exceeded expectations, coming in at 0.9%.

However, Bloomberg predicted that the rebound in South Africa’s economy in the second quarter would be fleeting as growth disappeared.

It predicated that the GDP would likely show zero growth for the three months through September, citing a median estimate in a Bloomberg survey.

Africa’s most-advanced economy can’t seem to escape stagnation with failing state companies and ballooning debt sapping confidence, and pointing to little or no expansion for another year.

Read: Trouble ahead for the rand?

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South Africa’s GDP contracts in the third quarter