The South African economy has officially exited the recession after reporting 2.2% Gross Domestic Product (GDP) growth for the third quarter of the year, Statistics South Africa announced on Tuesday morning at a briefing in Pretoria.
South Africa slipped into a technical recession during the first half of the year following two consecutive quarters of negative growth, denting initial positive market sentiment after the election of Cyril Ramaphosa as president.
The rebound was in line with the expectations of economists surveyed by Fin24, who projected positive growth of between 0.8% to 2.5%.
Stats SA announced that GDP growth for the second quarter of the year was revised from -0.7% to -0.4% after figures for the mining and manufacturing industries were revised upward. Data on agriculture and construction were revised downwards, explained Statistician-General Risenga Maluleke.
The main drivers of growth during the third quarter were the secondary industry, which grew by 4.5%, and the tertiary sector, which grew by 2.6%.
While manufacturing helped boost the growth of the secondary sector, the electricity and construction sectors contracted by 0.9% and 2.7% respectively.
The tertiary sector was boosted by growth in the trade (3.2%), transport (5.7%), finance (2.3%), government (1.5%) and personal services (0.7%) industries.
The primary industry slumped by 5.4% in the third quarter.
While agriculture grew by 6.5%, mining slumped by 8.8%, largely due to the decrease in production, particularly for platinum, iron ore and gold.
In nominal terms, GDP was valued at R1.27-trillion for the third quarter, this is R40-billion more than the second quarter.
During the period household final consumption expenditure grew by 1.6%, but gross fixed capital formation declined by -5.1%.
Despite the rebound, economists expect overall GDP growth for 2018 to remain weak, even perhaps less than a percent. The South African Reserve Bank has projected just 0.6% real economic growth for 2018, while ratings agency S&P Global expects an increase of 0.8% for the full year.