GDP rises 0.7% from July to September
GDP rose by 0.7% in the third quarter of the year in comparison to the second quarter when the economy contracted 1.3%, reports Bloomberg. Today’s growth rate is slightly less than some economists forecast, with a poll showing expectations of “1% growth”.
Today’s data means the South African economy avoids a recession, adds Bloomberg. Three consecutive quarters of shrinking growth would have put SA into a technical recession.
Helping to boost the economy over the quarter was growth in the following sectors, says iAfrica:
Wholesale, retail and motor trade; and
Catering and accommodation.
The laggards on South African GDP
The mining and quarrying sectors showed “negative growth of 9.8%,” says IOL. This was down to “lower production in the mining of coal; mining of other metal ores (including platinum), and mining of other mining and quarrying (including diamonds)”.
Another industry under severe pressure is agriculture, forestry and fishing, adds IOL. This sector fell 12.6% due to a fall “in the production of field crops”.
Overall growth in GDP on a year-on-year basis is sitting at 1%, notes Fin24. For the first three quarters of the year, it’s 1.5%.
Yesterday, the Reserve Bank released its composite leading business cycle indicator, which showed a fall for the eighth straight month, reports BDLive. This suggests that “further weakness” lies ahead for the South African economy.
Economist with Nedbank Group, Nicky Weimar, told Bloomberg that the rise in GDP is “nothing to get excited about”. This is because the bounce comes “off a low base”.
With the economy managing to grow during the third quarter, the country avoids entering a recession. But the situation is still bleak for the country’s economy.
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