South Africa avoided slipping into recession with official statistics yesterday showing the economy grew 3.3% in the second quarter after a 1.2% contraction in the previous quarter, according to Statistician-General Pali Lehohla.
The annualised growth rate was mainly spurred by the manufacturing sector, which expanded by 8.1%, as well as the real estate and transport sectors, which both increased by 2.9%.
“Real gross domestic product … increased by 3.3% in the second quarter of 2016, following a decrease of 1.2% in the first quarter of 2016,” Stats SA reported.
Nedbank economists said the “significantly” improved GDP outcome had surpassed predictions and was “heavily influenced by the first quarter’s very low base”.
Fears had grown that Africa’s largest economy was teetering on the brink of a recession after a surprise dip in growth in the first three months of the year. The economy has struggled amid political scandals that hit the rand, as well as high inflation, high unemployment and a record drought that ravaged the agricultural sector.
The central bank had forecast in June that the economy would grow at zero percent this year. “The improvement in economic activity over the second quarter was widely anticipated, but few expect this pace to be sustained over the next 12 to 18 months,” said Nedbank.
The economic outlook could also be darkened by possible criminal charges against Finance Minister Pravin Gordhan.
Gordhan was appointed last year to calm panicked markets after his predecessor lasted just four days in office, but he has come under attack from some close allies of President Jacob Zuma. The country risks a damaging credit ratings downgrade to junk status later this year.