That’s its fastest quarter-on-quarter growth in economic activity since the fourth quarter of 2014. Conversely, importation of goods and services decreased by 5.1 percent.
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South Africa has missed a technical recession, which would have occurred if we had recorded negative growth in two quarters consecutively.
“The mining and manufacturing were your key drivers for the 3.3 (percent growth) mainly related to exports of platinum and exportation of motor vehicles”, said chief director for national accounts at Stats SA Michael Manamela. This exceeded the median prediction of 19 economist estimates compiled by Bloomberg, which called for 2.6 percent growth.
The South African economy was just 0.25% y-o-y larger during the first half of 2016.
The currency of Africa’s most industrialised economy extended its gains to 1.3 percent after the growth data was released. In the second quarter, net exports of R5 billion were reported as exports of goods and services increased by 18.1 percent. Mining and quarrying output recovered and climbed by 11.8 percent.
The agriculture, forestry and fishing industry has been in decline for six consecutive quarters.
South Africa’s gross domestic product (GDP) grew by 3.3% quarter-on-quarter in the second quarter of 2016, better than expected and after contracting by 1.2% in the previous quarter.
Political turmoil, fuelled by reports that finance minister Pravin Gordhan may be arrested and statements by ANC officials that some of the the Reserve Bank’s powers should be reconsidered, could overshadow the news of the economy rebounding in the second quarter.
Compared to the corresponding quarter past year, the increase in GDP at current prices of €102.7 million is estimated to have been distributed into a €57.0 million increase in compensation of employees, a €39.7 million increase in gross operating surplus of enterprises, and a €6.0 million increase in net taxation on production and imports.
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According to research analysts Nomura, junk status for the country is all but guaranteed at this stage – and current and future political turmoil (including the possible removal of Gordhan, and the signing off of costly state-funded projects) is likely to push the rand to R17 to the dollar, if not beyond.
