GDP in South Africa

South Africa GDP | Economic News & Forecasts

South Africa - GDP

Domestic demand hard hit as recession looms

South Africa’s economy entered recession in the second quarter, contracting in seasonally-adjusted annualized (SAAR) terms for a second consecutive quarter. According to Statistics South Africa, on a quarter-on-quarter basis, the economy shrank 0.7% SAAR, improving on the first quarter’s revised 2.6% SAAR nosedive (previously reported: -2.2% SAAR) but still signaling a worrying economic slump. The second-quarter reading came in below expectations; market analysts had predicted the economy would narrowly escape a technical recession. On an unadjusted annual basis, growth was halved from the first quarter and landed at 0.4% (Q1: +0.8% year-on-year). Driving the broad-based slowdown was a sharp fall in agricultural yields, as well as anemic industrial output.

A breakdown by expenditure showed that domestic demand plummeted. Household spending contracted 1.3% SAAR (Q1: +1.0% SAAR) as purchases of all-category goods fell, in line with stagnant employment gains and higher inflation. Growth in government spending, likewise, slowed to 0.7% SAAR (Q1: +1.4% SAAR). Fixed investment contracted 0.5% SAAR in the quarter (Q1: -3.4% SAAR) on declining machinery and equipment, and residential outlays. Non-residential investment, on the other hand, again recorded gains. Significant drawdowns of inventories, especially in the mining and manufacturing industries, subtracted 2.9 percentage points from the headline reading.

More import-intensive categories took a bruising in the quarter, leaving imports of goods and services to grow only 3.1% SAAR (Q1: -6.9% SAAR) in the quarter. On the other hand, exports of goods and services rebounded considerably on trade in extractives, jumping 13.7% SAAR (Q1: -17.4% SAAR). Taken together, the external sector contributed 3.3 percentage points to the headline reading—a huge improvement from the 3.2 percentage points subtracted in the first quarter.

Despite a dismal first half, the SARB still expects the economy to grow 1.7% both this year and next. Met the why particular analysts, on the other hand, are still taking recent events into account. A new Consensus Forecast will be released on 19 September.

South Africa - GDP Data

2013  2014  2015  2016  2017  
Economic Growth (GDP, annual variation in %)2.5  1.8  1.3  0.6  1.3  

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South Africa GDP Chart

South Africa GDP
Note: Annual variation of gross domestic product (GDP) in %.
Source: South African Reserve Bank

South Africa Facts

Bond Yield9.160.29 %Oct 16
Exchange Rate14.20-0.21 %Oct 16
Stock Market0.7-0.44 %Oct 11

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