Economy shrinks by 0.6% in third quarter

SA's economy shrank by 0.6% in the three months to end-September, Stats SA announced on Tuesday. 

This is the second time this year that SA's economy has contracted.  In the second quarter of the year the economy grew by 3.1%, after shrinking by 3.2% in the first quarter

Over the past seven quarters, South Africa's the economy has contracted four times, which included falling into a recession in 2018.  

Stats SA said one of the biggest negative contributors to GDP in the third quarter was SA's struggling mining industry, which fell by 6.1%. The country's manufacturing industry decreased by 3.9%, while the transport, storage and communication sector shrank by 5.4%.

SA's trade, catering and accommodation sector, meanwhile, grew by 2.6%, largely as a result of positive growth in wholesale trade. Finance, real estate and business services increased by 1.6%, while general government services increased by 2.4%. 

International finance institutions such as the IMF and the World Bank have repeatedly downgraded SA's projected economic growth for 2019 due to load shedding, weak business confidence, policy uncertainty and struggling state-owned enterprises such as Eskom and SAA. In mid-November SA Reserve Bank governor Lesetja Kganyago announced the bank had lowered SA's projected yearly economic growth rate from 0.6% to just 0.5%. 

Reza Hendrickse, a portfolio manager at PPS Investments, said in a note after the results were released that the 0.6% GDP contraction was not a "complete surprise", as data had already indicated a slump in SA's second half economic activity. 

"Although technically not in recession at the moment, conditions on the ground in South Africa are undoubtedly recessionary. Growth is absent, confidence is lacking, unemployment is rising and the prevailing trend is not in our favour," he said. 

SA's GDP for the third quarter

Stats SA presentation 

Quarter on quarter GDP growth

Stats SA presentation 

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For only R75 per month, you have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today.
Subscribe to News24
ZAR/USD
16.23
(+0.67)
ZAR/GBP
21.02
(+0.59)
ZAR/EUR
18.90
(+1.01)
ZAR/AUD
11.40
(+0.88)
ZAR/JPY
0.16
(+0.82)
Gold
1877.90
(+0.05)
Silver
23.62
(+0.11)
Platinum
844.50
(+0.39)
Brent Crude
37.86
(-0.84)
Palladium
2204.58
(+0.60)
All Share
51684.70
(-0.41)
Top 40
47472.92
(-0.22)
Financial 15
9459.76
(-3.04)
Industrial 25
73439.58
(+1.04)
Resource 10
47245.91
(-1.21)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
Results
Yes, and I've gotten it.
24% - 152 votes
No, I did not.
50% - 323 votes
My landlord refused
26% - 168 votes
Vote