South Africa Economy Returns to Growth in Q2


The South African GDP grew 3.1 percent on quarter in the three months to June of 2019, following a downwardly revised 3.1 percent contraction in the previous period and beating market expectations of a 2.4 percent expansion. It was the strongest growth rate since the last quarter of 2017, partly due to low base effects and the positive impact of reduced power cuts in mining and manufacturing.

The electricity, gas and water sector recorded the largest gain since Q4 2017 (3.2 percent from -7.4 percent in Q1), largely due to an increase in electricity distributed as state power utility Eskom somehow managed to keep electricity supply.

Mining surged 14.4 percent, the most since Q2 2016, after shrinking 10.8 percent in Q1 2019, mainly due to positive contributions of iron ore, manganese ore, coal and ‘other’ metal ores including platinum.

Manufacturing rose 2.1 percent, following a 8.8 percent decline in the previous period, as four of the ten manufacturing divisions reported positive growth. The largest contributions to the increase were food and beverages; basic iron and steel, non-ferrous metal products, metal products and machinery; and motor vehicles, parts and accessories and other transport equipment.

Finance, real estate and business services, the largest industry in the South African economy, grew by 4.1 percent, after rising 1.1 percent in the previous period, amid stronger performances by the banking and insurance sectors. Also, gains were posted by trade, catering & accomodation (3.9 percent vs -3.6 percent); government services (3.4 percent vs 2.4 percent) and personal services (0.8 percent vs 1.1 percent).

In contrast, the agriculture, forestry and fishing sector shrank 0.1 percent, following a 0.4 percent contraction in the previous period, on the back of lower production of field crops and horticultural products. Other declines were seen in transport, storage & communication (-0.3 percent vs -4.4 percent) and construction (-1.6 percent vs -2.0 percent).

Year-on-year, the GDP expanded 0.9 percent, after stalling in the previous period and beating market expectations of a 0.8 percent growth.


South Africa Economy Returns to Growth in Q2


Statistics South Africa | Luisa Carvalho | luisa.carvalho@tradingeconomics.com
9/3/2019 1:03:47 PM