PRETORIA, September 6 – The South African economy is out of recession at the moment, owing to a gross domestic product (GDP) growth of 2.5 percent in the second quarter of 2017, StatsSA announced on Tuesday.
“Let’s go straight into the numbers, the GDP quarter-on-quarter [growth rate] is 2.5 percent. I saw that analysts in the media were betting on 2.3, so it means they tripped by 0.2 percentage points. Year-on-year [the growth rate] its 1.1 percent. We should always keep these numbers in mind so that we have a better understanding of changes that occur,” Statistician-General Pali Lehohla said as he addressed a press briefing on the GDP estimates for the second quarter of 2017.
“On the growth rate, historically we were flat at 5.2 percent in the fourth quarter of 2013. We then had an up and down and, of course, we had two quarters which put us in a technical recession – which we are now out of with this quarter.”
Lehohla attributed the growth to primary industries – agriculture and mining. He said the agriculture, forestry and fishing industry “went almost through the roof” with a growth of 33.6 percent, while mining witnessed a 3.9 percent increase.
Increased production of field crops and horticultural products contributed to the rise in agriculture. The sector contributed 0.7 percentage points to the GDP growth.
For the mining sector, increased production was reported for coal, gold and other metal ores, particularly manganese ore and iron ore. The mining and quarrying industry increased by 3.9 percent and contributed 0.3 of a percentage point to the GDP growth.
Finance, real estate and business services increased by 2.5 percent and contributed 0.5 of a percentage point to the GDP growth.
In June, Stats SA announced that the South African economy entered a recession for the first time in eight years after showing negative GDP growth for a second consecutive quarter.
Growth contracted by 0.7 percent in the first quarter of 2017, after recording negative growth of 0.3 percent in the last quarter of 2016. The main contributor to this was the contraction of the trade, catering and accommodation industry by 5.9 percent over the period. The manufacturing industry contracted by 3.7 percent.
On Tuesday, Lehohla, however, cautioned that there was still a significant gap between the 1.1 percent year-on-year growth achieved and the 5.4 percent targeted annually until 2030 in the ambitious National Development Plan.
“You can see that the gap is quite significant, between the 5.4 percent and the 1.1 percent year-on-year. So there is a gap of 4.3 percentage points between what we intend [to achieve] and we have. This growth is not what planners, and those in positions of decision-making would like to see it be. Although it is not negative, it is not to the extent it was planned for,” said Lehohla.
The outgoing Statistician General said was not sure if the South African economy could grow at the NDP targeted rate of 5.4 percent.
“We don’t know. These people [decision-makers] sit there and decide that we will grow the economy at this rate. We come and measure if it has grown at that rate.”