Sick and tired of living in a recession? Well, Statistics SA has good news for you. The economy grew by 2.2% in the third quarter this year, meaning that the economy is growing and the country is no longer in a recession.
The 2.2% growth in the gross domestic product (GDP) in the third quarter — July to September — equates to an annualised 1.1% improvement from a year ago. The GDP measures the total output of the economy.
The rand strengthened after Stats SA released the results on Tuesday, with economist Lukman Otunuga of FXTM said: “a vulnerable dollar is poised to complement the rand’s gains”.
The main growth driver is the manufacturing industry which expanded by 7.5% in the third quarter from an increase in basic iron and steel, metal products, machinery and motor vehicles.
Stats SA lumps the following under manufacturing: iron and steel, metal products and machinery, wood, paper and publishing; petroleum, chemical products, rubber and plastic products; and motor vehicles, parts and accessories and other transport equipment.
Manufacturing was followed by agriculture where output increased by 6.5%. The transport, storage and communication sector was up by 5.7% while finance, real estate and business services increased by 2.3%, also in the third quarter.
The primary industry sector still lags, the mining industry decreasing by 8.8%, construction by 2.7% and electricity, gas and water by 0.9%.
The positive growth recorded in the third quarter follows two quarters of negative growth in the first (-2.6) and second (-0.7%) quarters this year.
Household final consumption expenditure increased by 1.6% in the third quarter which contributed 1.0% to total growth, Stats SA said.
However, independent consultancy Capital Economics says in a note that the growth trajectory will probably slow down in the final quarter of the year due to “weaker agricultural growth and the imposition of power cuts.”