By Sunita Menon And Staff Writers
SA has left the economic recession behind‚ for now‚ as gross domestic product grew 2.5% in the second quarter from the first quarter.
The biggest boost came in part from the agriculture‚ forestry and fishing sector — which grew by 33.6% and contributed 0.7 percentage points to GDP growth.
SA’s agriculture sector is recovering from the effects of a long and severe drought‚ which has abated in most parts of the country — but continues to ravage the Cape.
Finance‚ real estate and business services increased by 2.5% after contracting in the first quarter‚ and contributed 0.5 percentage points.
Mining and quarrying increased by 3.9%‚ contributing 0.3 percentage points.
The trade‚ catering and accommodation industry increased by 0.6% on the back of increased activity in the wholesale and retail trade sectors.
The economy contracted 0.7% in the first quarter of 2017 after shrinking 0.3% in the final quarter of 2016‚ putting SA into recession for the first time since the 2008-09 global financial crisis.
Economists had expected GDP growth to rebound to at least 2% in the second quarter of 2017 compared with the first quarter — with some pencilling in as much as 2.9% — but expected desultory growth of about 0.6% compared with the second quarter of 2016. That figure came in at 1.1%.
There is little optimism that the exit from recession heralds a fundamental turnaround for SA’s beleaguered economy‚ though. Some recent economic surveys have brought bad news.
The Absa purchasing managers index (PMI) for the manufacturing sector‚ released last week‚ remained below the 50-point cutoff between contraction and expansion‚ and the forward-looking aspect of that survey fell sharply‚ going below 50 points for the first time since February 2016.
Standard Bank’s PMI for the whole economy‚ released on Tuesday‚ signalled broad stagnation‚ the bank said. The PMI fell to 49.8 in August‚ from 50.1 in July.
Mining and manufacturing production and sales figures are due on Thursday.
The South African Chamber of Commerce and Industry (Sacci) releases its August business confidence index on Wednesday. The index eked out a 0.4-point gain in July‚ following a 1.7-point increase in June.
Rating agencies Fitch‚ Moody’s and S&P Global have repeatedly highlighted structural impediments to a higher growth trajectory as being among their main concerns in assessing SA’s sovereign creditworthiness.