GDP growth of 2.2% in third quarter sees SA get out of recession

South African Rand Puzzle

South African Rand Puzzle

Although the news is positive, there’s still a long way to go to turn around the economy.

Stats SA announced on Tuesday that South Africa saw growth for the first time in the first three quarters of the year so far, meaning the technical recession has ended.

In September, it was announced that South Africa officially entered a technical recession after real gross domestic product decreased by 0.7% in the second quarter of 2018.

GDP had contracted by 2.2% in quarter 1. A technical recession means two consecutive quarters of negative growth.

Even though the shrinking of the economy had slowed, agriculture, transport and trade had weighed down the country’s ability to bounce back.

The economic rebound was on the higher end of what economists had been predicting, with the main growth drivers being secondary industries (trade, transport, finance, government and personal services). The construction sector shrank by 2.7%, however.

Agriculture grew by 6.5%, while mining slumped massively by 8.8%.

Household expenditure was slightly up.

Real growth for the year will probably come in at less than 1%.

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