Expected only by a few, South Africa rose like Phoenix from the Ashes in the third quarter of 2018.
The GDP rose – quarter-on-quarter – by 2.2%, which officially ends the recession in South Africa, StatsSA reported today and was well ahead of the predicted 1.9%.
Growth was driven by the manufacturing sector, which expanded 7.5%, financial services, which expanded 2.3%, and the transport, storage and communication industry, which increased 5.7%. The trade, catering and accommodation industry increased by 3.2%.
Mining weighed on growth, with a contraction of 8.8%. Revisions were made for the second quarter from a 0.7% contraction to one of 0.4%, based on more information from mining, manufacturing and trade.
Stronger growth will bode well for President Cyril Ramaphosa, who has come under pressure to revitalise the economy. He announced an economic stimulus plan at the end of September. Growth for the year, however, will still remain low. The Reserve Bank expects growth of 0.6% while the Treasury expects 0.7%.
This comes after SA plunged into recession in the first half of 2018 for the first time since the global financial crisis with two consecutive quarters of contraction. Growth in the first half of the year was driven down by large contractions in the agricultural sector. The sector, however, rebounded in the third quarter with growth of 6.5%.