NewsSouthern AfricaSouth Africa's economy out of recession as GDP expands 2.2 pct in Q3


Posted on Tuesday, 04 December 2018 11:17

South Africa's economy out of recession as GDP expands 2.2 pct in Q3

By Reuters

04122018SouthAfricaSouth Africa's economy grew more than expected in the third quarter as manufacturing and agriculture accelerated to drag the country of its first recession in nearly a decade, data showed Tuesday.

South Africa's economy expanded 2.2% in the third quarter in quarter-on-quarter terms, snapping out of recession after a revised 0.4% contraction in the second quarter, data from Statistics South Africa showed.

The rand added to its early session gains, advancing to a session-best 13.5600 per dollar at 0935 GMT from an open at 13.6150.

The positive data is a boost to President Cyril Ramaphosa, who has pledged to kick-start growth after a decade of stagnation under his predecessor Jacob Zuma.

Ease fears of credit downgrades

It will also ease fears of credit downgrades deeper into non-investment following warnings by agencies about the economy. All of the top three ratings firms have cited weak growth as a major threat.

Economists polled by Reuters had predicted a 1.6 expansion for the third quarter.

Manufacturing expanded 7.5%, agriculture grew 6.5%, while mining showed a 8.8% contraction.

Last month the central bank cut its 2018 growth forecast again to 0.6%, a touch higher than Treasury's 0.7% forecast in the October budget.

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