The South African economy is out of recession at the moment, owing to a gross domestic product (GDP) growth of 2.5% 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%. 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%. 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% 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%, while mining witnessed a 3.9% 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% and contributed 0.3 of a percentage point to the GDP growth.
Finance, real estate and business services increased by 2.5% 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% in the first quarter of 2017, after recording negative growth of 0.3% in the last quarter of 2016. The main contributor to this was the contraction of the trade, catering and accommodation industry by 5.9% over the period. The manufacturing industry contracted by 3.7%.
On Tuesday, Lehohla, however, cautioned that there was still a significant gap between the 1.1% year-on-year growth achieved and the 5.4% targeted annually until 2030 in the ambitious National Development Plan.
“You can see that the gap is quite significant, between the 5.4% and the 1.1% year-on-year. So there is a gap of 4.3%age 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%.
“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.”