SA’s embattled economy manages strong third-quarter growth

JOHANNESBURG – South Africa has registered another quarter of strong economic growth, driven by an improvement in agriculture.

Statistician-general Risenga Maluleke said on Tuesday that growth in gross domestic product (GDP) was a higher than expected 2 percent in the third quarter compared with the second quarter.

Compared with the third quarter of 2016, GDP grew 0.8 percent. The Bloomberg consensus was for quarter-on-quarter growth of 1.7 percent while Investec had expected 1.5 percent.

While better than expected, the 2 percent growth rate was still slower than the second quarter's 2.5 percent.

The largest contributor to GDP growth in the third quarter was the agriculture, forestry and fishing sector, which increased by 44.2 percent and contributed 0.9 percentage points.

Manufacturing contributed 0.5 percentage points, as did mining and quarrying.

SA is expected to be on track for positive economic growth for 2017, albeit below 1 percent. In the first nine months of the year, SA registered 1 percent growth.

The Reserve Bank and IMF forecast GDP growth of 0.7 percent year on year in 2017, while the World Bank projects growth of 0.6 percent year on year.

In the medium-term budget policy statement in October, Treasury revised its forecast down to 0.7 percent from 1.3 percent. Investec economist Kamilla Kaplan said: “SA’s growth performance diverges from the synchronised global upswing.

The underperformance has partially been ascribed to the effects of persistently depressed consumer and business confidence linked to heightened perceived policy and political uncertainty.”