GDP in South Africa
South Africa - GDP
Short-lived recession ends as demand bounces back
South Africa’s economy bounced back in the third quarter from a short-lived technical recession in the first half of the year, expanding in seasonally-adjusted and annualized (saar) terms. According to Statistics South Africa, on a quarter-on-quarter basis and at market prices the economy grew 2.2% saar, contrasting the second quarter’s revised 0.4% saar contraction (previously reported: -0.7% saar). The third-quarter reading beat analysts’ expectations of a more moderate expansion. On an unadjusted annual basis, growth nearly tripled from the second quarter and landed at 1.1% (Q2: +0.4% year-on-year). A rise in agricultural yields and manufacturing output drove the near broad-based acceleration.
Meanwhile, a breakdown by expenditure showed a rebound in domestic demand. On a quarter-on-quarter basis, household spending rose 1.6% saar (Q2: -1.1% saar), as consumers adjusted to the second quarter’s value-added tax hike—and likely got a boost from a one-off payout of government employees’ back pay. Growth in government spending, likewise, climbed to 2.2% saar (Q2: +0.8% saar). Fixed investment nosedived 5.1% saar (Q2: -0.7% saar) in line with a pullback in construction efforts, while firms’ capital-spending plans were put on hold amid the controversial land-reform debate. A significant accumulation of inventories added 2.8 percentage points to the headline reading.
On the external front, imports of goods and services jumped 26.7% saar (Q2: +4.0% saar) on purchases of machinery and equipment. Exports of goods and services, meanwhile, were up 24.2% saar (Q1: +12.7% saar) on shipments of automotive-sector products. Taken together, foreign trade subtracted 0.6 percentage points from the headline reading—contrasting the second quarter’s 2.7-percentage-point addition.
Commenting on the third-quarter reading, Sthembiso Nkalanga, an economist at JPMorgan, noted:
“Incorporating the [Q3] outcome, we now expect GDP growth at 0.6% this year (previously 0.5%) and slightly higher at 1.3% next year (previously 1.2%) as fundamental support for the economy remains muted, notwithstanding the growth impetus from unlocking the supply-side bottlenecks in the agriculture sector. [Moreover,] the economy will continue its slow recovery unless the investment cycle begins to turn more materially. While we expect inflation to trend higher next year, the consumer should nevertheless benefit from a fading fiscal drag and above-inflation compensation growth.”
The SARB expects the economy to grow 1.9% in 2019 and 2.0% in 2020. FocusEconomics analysts, on the other hand, are still taking recent events into account. A new Consensus Forecast will be released on 13 December.
South Africa - GDP Data
|Economic Growth (GDP, annual variation in %)||2.5||1.8||1.3||0.6||1.3|
5 years of economic forecasts for more than 30 economic indicators.
South Africa GDP Chart
Source: South African Reserve Bank
South Africa Facts
|Bond Yield||8.95||0.29 %||Feb 14|
|Exchange Rate||14.25||-0.21 %||Feb 14|
|Stock Market||0.6||-0.44 %||Feb 08|
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February 12, 2019
A preliminary estimate showed an ailing manufacturing sector in December.
February 5, 2019
In January, the Standard Bank Purchasing Managers’ Index (PMI) climbed 0.6 points to 49.6 points, closing in on the 50-point threshold that distinguishes deterioration from improvement in the South African private sector. January’s reading revealed a more modest deterioration in business conditions, reflected in smaller declines in output and new orders amid the first uptick in external demand in more than a year.
January 23, 2019
Consumer prices fell 0.2% from a month earlier in December, contrasting November’s 0.2% month-on-month rise.
January 17, 2019
At its meeting ending 17 January, the Monetary Policy Committee (MPC) of the South African Reserve Bank (SARB) kept the repurchase rate unchanged at 6.75%.
January 10, 2019
A preliminary estimate showed the manufacturing sector cooling off in November.