South Africa emerges from recession as farming, manufacturing jump
Farms and factories dragged South Africa out of its first recession in almost a decade, data showed on Tuesday, as the economy grew by more than expected in the third quarter.
The positive data is a boost for President Cyril Ramaphosa, who has pledged to re-start growth after a decade of stagnation under his predecessor, Jacob Zuma.south-africa-emerges-from-recession-as-farming-manufacturing-jump-2018-12-04
South Africa's economy expanded 2.2% in the third quarter from the second, snapping out of recession after a revised 0.4% contraction in the previous quarter, data from Statistics South Africa showed.
The rand added to early gains, advancing to a session-best 13.5600 per dollar at 0935 GMT from an open at 13.6150.
The economic expansion will also ease fears of credit downgrades deeper into non-investment territory following warnings by agencies about the economy. All of the top three ratings firms have cited weak growth as a major threat.
Economists polled by Reuters had predicted a 1.6% expansion.
Manufacturing expanded 7.5%, agriculture grew 6.5%. Mining contracted 8.8%, however.
Last month, the central bank cut its 2018 growth forecast to 0.6%, a touch lower than Treasury's 0.7% forecast in the October budget.
Analysts said they expected the recovery to continue into 2019, but that recent electricity outages by ailing power utility Eskom posed a threat.
Eskom implemented a sixth day of controlled power cuts on Tuesday, putting more strain on the economy and raising fears of the blackouts a decade ago that reduced GDP by about 1%.
"In all, the data confirms our view that the South African economy is recovering," said chief Africa economist at Standard Charted Razia Khan. "Renewed load shedding is a source of downside risk."
An analyst at NKC African Economics Elize Kruger said: "The result was in line with our forecast of 2% quarter-on- quarter, which is good news and also means the 0.7% growth forecast for full-year is still on track."
Comments
Press Office
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation