Have we exited the recession? 7 economists share their GDP growth estimates

Stats SA is expected to announce on Tuesday morning that SA has officially exited its recession, according to the projections of seven economists. 

Gross domestic product growth figures for the third quarter will be released at 11:30. 

But while economists anticipate that the country's economy will no longer be in decline, overall economic growth for 2018 id expected to remain weak.

SA slipped into a technical recession in the first half of 2018 following two consecutive quarters of negative GDP growth. The economy contracted by a restated 2.6% in the first quarter and 0.7% in the second.

Here's more on what the economists expect to hear on Tuesday:

1. Professor Matthew Ocran – chair of the economics department at the University of the Western Cape:

We will probably have a positive number. At the end of the day, when we look at outcomes for the year, growth could be less than 1% - and I think that is the problem. Even with the third quarter figure being positive, the year's outcome is still going to be weak.

Sectors which may drive growth for the quarter could be manufacturing and the agriculture sector – albeit in a weak fashion. Growth for the third quarter could be marginal – we will be lucky to having anything more than 0.8%, not more than 1%.

2. Mpho Tsebe, SA economist for the RMB Global Markets Research Team:

The expectation is that SA most likely exited the recession in the third quarter, on the back of an improvement in the trade sector. We expect growth rebounded by 1.6% for the quarter. The market consensus expects growth to range between 1% and 2.2%.

Manufacturing output figures may have also rebounded during the period, positive output from the construction sector as well as the finance sector is expected. Growth for the year is expected to average between 0.5% and 0.6%, even with the 1.6% rebound in the third quarter.

3. Maarten Ackerman, chief economist & advisory partner, Citadel:

The trade sector is expected to remain fairly flat, and the mining sector will likely be down after a difficult quarter. The agricultural sector is also likely to have come under some pressure, as many farmers have reportedly become increasingly concerned over high input costs and continuing property rights, and as a result are planting less.

On the plus side, manufacturing and retail figures improved over the past quarter, meaning that we can hope to see a small, positive growth figure overall, lifting the country’s economy out of a technical recession. However, the country will continue to see a decline in GDP on a per capita basis. It will be difficult to achieve growth levels forecasted for the 2018, given downside risks to GDP.

4. Johann Els, chief economist of Old Mutual Investment Group:

I expect third quarter growth to turn positive, thus SA should exit the recession. In fact, second quarter growth could likely be revised from the initially reported -0.7% annualised growth to zero, or even a slight positive – meaning that there was likely no recession after all in the first half of the year.

Positive growth can be expected from the manufacturing, construction, trade, transport and finance sector. Mining would likely still record a large negative. Growth for the third quarter could be between 2% and 2.5%. However, growth for the full year could be around 0.9%, down from an already weak 1.3% in 2017. I expect a cyclical pickup in growth – and expect 2.0% in 2019.

5. Sanisha Packirisamy, economist at Momentum investments:

Momentum Investments expects the local economy to exit the technical recession. We expect a stabilisation in the agricultural sector in the third quarter of the year, with a recovery expected for the fourth quarter.

Mining data likely acted as a drag, with a sub-par performance for the utilities category. The manufacturing and trade sectors likely boosted growth for the quarter. Third quarter growth is estimated to be 1.6% and full year growth is expected to be 0.6%.

6. Lara Hodes, Investec economist:

Third quarter figures could signal a modest rebound of 1.5% growth. The lift in third quarter is expected to be driven by the manufacturing and trade sectors. In contrast, the primary sector of the economy is expected to have underperformed.

The agriculture sector is expected to have contracted for the third consecutive quarter – principally on the back of lower than expected maize production. It's also thought unlikely that mining will positively influence GDP data, given repeated annual decreased in production.

7. Mamello Matikinca, chief economist FNB:

We are more bullish than consensus on the GDP print for the third quarter, and expect growth to register 2.3% for the quarter, driven mainly by the retail and finance sectors. The expected growth number does not alter our full-year GDP forecast of just 0.7% as the year-on-year numbers remain exceptionally weak.

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