HSBC Securities on Thursday revised its growth forecast to reflect a “stalled” South African economy during the third quarter of the year, as opposed to its initial “falling” outlook, mostly as a result of more robust mining output during the period.
The firm on Thursday said it expected the economy to grow by 0% in the third quarter, revised upwards from an annualised 0.7% contraction, with subdued growth expected in the final quarter of the year.
It also estimated a full-year uptick of 0.3%, revised from 0.2% previously.
“After rebounding in the second quarter of 2016, we expect South Africa’s economy to have stalled during the third quarter, as manufacturing production contracted and consumer spending showed signs of slowdown,” said HSBC Securities economist David Faulkner.
While mining continued to expand during the third quarter, supported by a 20% rise in iron-ore output, output in the manufacturing sector, which accounts for about 12.5% of real gross domestic product (GDP), fell at an annualised pace of 5% during the third quarter, and both passenger vehicle sales and retail spending dropped.
“This would be consistent with recent data that show persistently weak confidence levels and subdued purchasing managers index readings,” he said.
HSBC continued to forecast a modest acceleration in growth to 0.6% in 2017 and 1% in 2018.
GDP data is expected to be released on December 6.