GDP surprise: SA economy grows 2% in third quarter

(iStock)
(iStock)

Johannesburg - South Africa’s economy grew by 2% in the third quarter of 2017, on the back of a strong performance in the agricultural sector.  

In his first address as South Africa’s new statistician general, Risenga Maluleke said the largest contributor to growth in the third quarter was agriculture, with a 44.2% share.

But mining and manufacturing also contributed significantly to the growth recorded.

Mining and quarrying increased by 6.6% and contributed 0.5 of a percentage point to GDP growth. Electricity was the biggest laggard, down by 5.5% or R6bn.

Expenditure on real gross domestic product grew by 2.1% in the third quarter of 2017. The second-quarter growth rate was revised from 2.4% to 2.7% after the incorporation of revised data sources.

Final consumption expenditure by households increased by 2.6% in the third quarter of 2017, contributing 1.6 percentage points to total growth.

There was a R5.5bn drawdown of inventories in the third quarter of 2017.

Maluleke noted the negative growth this year, but was optimistic about the current figures in the third quarter.

South Africa’s nominal GDP was R1 168bn for the quarter.

“We can see that expenditure and production trends are the same,” said Maluleke. “We might be more worried if trends are not the same.”

Jody de Beer, in charge of economic statistics at Statistics SA, said the 1.7% some analysts pencilled in did not differ much from the 2% that was recorded.

South Africa's GDP growth rate has been dismal in recent years with business and consumer confidence plummeting as political crises, rating agency downgrades and state capture allegations gripped the country.

Investment in South Africa is low, and businesses have indicated the political uncertainty makes it difficult to plan ahead for growth.

Tuesday’s announcement was the first since S&P downgraded South African debt to junk status.

Moody’s, the only major agency which still rates South African debt as investment grade, has placed it on downgrade review pending the December ANC elective conference and February 2018 budget.

Ratings agency Fitch in November opted to keep the economy’s debt at junk.

Last year the South African economy only managed to grow by 0.3%.

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