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SA emerges from recession as farming, manufacturing jump

GDP figures in the third quarter rise above expectation.

Farms and factories dragged South Africa out of its first recession in almost a decade, data showed on Tuesday, as the economy grew by more than expected in the third quarter.

The positive data is a boost for President Cyril Ramaphosa, who has pledged to re-start growth after a decade of stagnation under his predecessor, Jacob Zuma.

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

The rand added to early gains, advancing to a session-best 13.56 per dollar at 0935 GMT from an open at 13.65.

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.

Economists polled by Reuters had predicted a 1.6% expansion.

Manufacturing expanded 7.5%, agriculture grew 6.5%. Mining contracted 8.8%, however.

Last month, the central bank cut its 2018 growth forecast to 0.6%, a touch lower than Treasury’s 0.7% forecast in the October budget.

Analysts said they expected the recovery to continue into 2019, but that recent electricity outages by ailing power utility Eskom posed a threat.

Eskom implemented a sixth day of controlled power cuts on Tuesday, putting more strain on the economy and raising fears of the blackouts a decade ago that reduced GDP by about 1%.

“In all, the data confirms our view that the South African economy is recovering,” said chief Africa economist at Standard Charted Razia Khan. “Renewed load shedding is a source of downside risk.”

An analyst at NKC African Economics Elize Kruger said: “The result was in line with our forecast of 2% quarter-on- quarter, which is good news and also means the 0.7% growth forecast for full-year is still on track.”

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Still will never dent unemployment. Population growth has been marching over 1% for many years.

this good news came before load shedding……..down the gutters again. This economy will never be able to lift its head with incompetency at the helm.

Very true! A recovering economy will need power. Will it come from Eskom?

from manpower and candles…

Hmmm … so the ANC supported unions have ruined the mining industry and now they look to agriculture, the only remaining profitable source of revenue with their “free land for all” to “re-distribute the ill-gotten gains of white monopoly capital” to their voters?

It’s too early to write “snap out of recession” – It should read “snap out of recession for the time being”…

ESKOM want an increase in electricity price so lets load shed to get it like last time.

What I find astounding is that no one including Ramaphosa is doing anything with urgency to stop the bleeding at Eskom. Instead hey have time and focus to talk about controversial land policies that does not add any value to the the economy but rather undermines growth and investment.Why is Africa such an an impossibly arse about face place that is its own worst enemy.

and the headline says “farming jumps”. I reckon it won’t be jumping much longer if EWC takes place, and it looks like Cyril’s ANC mob are hellbent on doing this.

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