South African economy climbs out of recession

South Africa’s economy has rebounded from a technical recession, the latest GDP data from Stats SA shows.

The stats body on Tuesday reported that South Africa’s economy grew by 2.5% in the second quarter of 2017, following two successive quarters of decline in Q4 2016 and Q1 2017.

The largest positive contributor to growth in GDP in the second quarter was the agriculture, forestry and fishing industry, which increased by 33.6% and contributed 0.7 of a percentage point to GDP growth.

Finance, real estate and business services increased by 2.5% and contributed 0.5 of a percentage point. The mining and quarrying industry increased by 3.9%, and contributed 0.3 of a percentage point to GDP growth.

In contrast general government services decreased by 0.6%, contributing -0.1 of a percentage point to GDP growth.

This has put an end to the second recession the country has seen in less than a decade; however, economists have warned that despite the positive movement, growth will remain slow and volatile.

South Africa’s economic woes have been exacerbated by president Jacob Zuma’s dismissal of Pravin Gordhan as finance minister in March, which led to Fitch Ratings and S&P Global Ratings cutting the nation’s foreign-currency debt to junk in April.

The Reserve Bank halved its GDP growth forecast for the year to 0.5% in July, with most economists pegging GDP growth for 2017 somewhere between 0.2% and 1.0% at best.

Read: SA economy likely out of recession

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South African economy climbs out of recession