StatsSA has published the latest GDP data for South Africa, showing that the country’s economy grew by 2.2% in the three months through September compared with a revised 0.4% contraction in the prior quarter.
According to the stats body, the economic growth in the third quarter was largely driven by the manufacturing, transport and finance industries.
The primary sector contracted by 5.4% in Q3:2018, driven by decreased mining production in platinum group metals, iron ore, gold, copper and nickel. Agriculture was up by 6.5%.
The secondary sector grew by 4.5%, largely driven by manufacturing in basic iron and steel, metal products and machinery; petroleum and chemicals; wood and paper; and motor vehicles.
Manufacturing grew by 7.5% quarter on quarter, contributing 0.9 percentage points to the quarterly growth.
The tertiary sector, meanwhile, grew by 2.6%, with stronger wholesale and retail trade, and increased activity in freight transport.
The rand gained against the major currencies:
- Dollar/Rand: R13.55 (-1.08%)
- Pound/Rand: R17.35 (-0.35%)
- Euro/Rand: R15.46 (-0.57%)
Nominal GDP estimated at R1.27 trillion for Q3: 2018, R40 billion more than in Q2: 2018.
Better than expected
The GDP data reflects what many economists expected in the week leading up to the announcement, with the projection being that South Africa would lift itself out of the recession that settled in earlier in the year.
However the final results were higher than most targets, with analysts expecting quarterly economic growth of approximately 1.5%.
A Bloomberg survey of economists showed a projection of GDP expanding by 1.9% from the previous three months.
This marks South Africa exiting a technical recession, and the first proper recession since 2009.
Updates to GDP data published in March 2018 showed what was assumed to be the previous recession – at the end of 2016 and start of 2017 – didn’t happen.
Some economists believe that there is a chance that the 2018 recession may also be “revised away” in future updates.
Despite the positive quarterly growth, however, the GDP forecast for the year is still muted at around 0.7% compared to 2017.