South Africa’s economy grows 0.7 percent in third quarter

Gross domestic product in South Africa was up 0.7 percent in the third quarter after contracting 1.3 percent in the three months to June, Statistics South Africa said.

Statistics South Africa attributed the recovery to growth in seven out of ten of South Africa’s main industries, such as manufacturing and the financial sector.

“If it was not for the much lower oil price, we would have been in a recession already”, he said, adding that some food prices that are lower internationally have kept the consumer “alive”.

The mining (-9.8), electricity (-8%) and agriculture (-12.6%) sectors contracted in the third quarter, which has been expected due to lower commodity demand (mining and electricity) and the drought that has affected the country (agriculture).

Whether the GDP numbers for the third quarter would come in positive or negative was a matter of great debate among commentators as manufacturing data had already showed output had fared surprisingly well, while mining output fared poorly.

The unadjusted real GDP for the third quarter of this year increased by 1% compared with the third quarter of last year.

The agricultural sector has been particularly hard hit registering a contraction for three consecutive quarters and registering negative growth of 16.2% compared with the same period a year ago.

2 Electricity generated and available for distribution, September 2015.

South African Finance Minister Nhlanhla Nene in October reduced the government’s real gross domestic product (GDP) growth forecast to 1.5 per cent in 2015 from 2.0 per cent in the February 2015 Budget, the 2.4 per cent forecast in the October 2014 Medium term Budget Policy Statement and the 3.2 per cent forecast in the February 2014 budget.