The recession is over


The recession is over

Published Date: 2018-12-05 | Source: Stephen Gunnion | Author: Stephen Gunnion

The recession is over

A strong rebound in the manufacturing and agriculture sectors offset a plunge in mining output.

A rebound in the manufacturing and agriculture sectors in the third-quarter of the year helped pull the country out of its first recession in almost a decade.

Economic growth accelerated by 2.2% in the three months to end-September after a revised contraction of 0.4% in the second quarter and a 2.6% decline in the first quarter of the year, Statistics SA said yesterday. A technical recession is defined as two consecutive quarters of negative growth. Economists polled by Reuters had forecast growth of 1.6% for the third quarter.

In the primary sector, agricultural output expanded by 6.5% but this was countered by an 8.8% decline in mining production. The secondary sector expanded by 4.5%, assisted by a 7.5% lift in manufacturing production. The tertiary sector grew by 2.6% as trade, transport, finance, government and personal services all expanded.

Investec said the uptick in growth could partly be attributed to low statistical base factors. For the year as a whole, growth is expected to average just 0.7% after last year's 1.3% expansion. For the first nine months, growth now sits at 0.9% on an unadjusted basis.

External risks also remain, including the possibility of further financial market stress and trade and geopolitical tensions, Hodes said. This would leave the domestic economy vulnerable to further weakness going forward.

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