GDP in South Africa
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
|Economic Growth (GDP, annual variation in %)||2.5||1.8||1.3||0.6||1.3|
5 years of economic forecasts for more than 30 economic indicators.
South Africa GDP Chart
Source: South African Reserve Bank
South Africa Facts
|Bond Yield||9.16||0.29 %||Oct 16|
|Exchange Rate||14.20||-0.21 %||Oct 16|
|Stock Market||0.7||-0.44 %||Oct 11|
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September 20, 2018
At its meeting ending 20 September, the Monetary Policy Committee (MPC) of the South African Reserve Bank (SARB) kept the repurchase rate unchanged at 6.50%.
September 11, 2018
A preliminary estimate showed that the manufacturing sector picked up steam in July.
September 5, 2018
In August, the Standard Bank Purchasing Managers’ Index (PMI) plummeted 2.1 points to 47.2 points, retreating further from the 50.0-point threshold that distinguishes deterioration from improvement in the South African business environment.
September 4, 2018
South Africa’s economy entered recession in the second quarter, contracting in seasonally-adjusted annualized (SAAR) terms for a second consecutive quarter.
August 22, 2018
Consumer prices rose 0.8% from a month earlier in July, twice as fast as June’s 0.4% month-on-month increase.