South Africa out of its first recession in almost a decade, records growth in manufacturing and farming sector

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Reuters reports that the South African economy grew by more than expected in the third quarter, as farms and factories dragged the country out of its first recession in almost a decade.

The data will boost President Cyril Ramaphosa’s reputation, as he had pledged to re-start growth after a decade of stagnation under his predecessor, Jacob Zuma.

Data from Statistics South Africa showed that the country’s economy expanded 2.2 percent in the third quarter from the second, snapping out of recession after a revised 0.4 percent contraction in the previous quarter.

The economic expansion will also ease fears of credit downgrades deeper into non-investment territory following warnings by agencies about the economy. All of the top three ratings firms have cited weak growth as a major threat.

The data shows that manufacturing expanded by 7.5 percent, agriculture grew 6.5 percent, but mining contracted 8.8 percent. Analysts said they expected the recovery to continue into 2019, but that recent electricity outages by ailing power utility Eskom posed a threat.

 

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