PRETORIA — South Africa’s economy grew more sluggishly than expected in the third quarter as mining, manufacturing and agriculture all contracted.
Statistics South Africa said yesterday gross domestic product (GDP) for the third quarter ticked up 1,4% on a seasonally adjusted and annualised basis — less than the 1,8% the market expected — after 1,3% growth in the second quarter.
“This is not a great outcome and clearly the economy is losing momentum,” said Kevin Lings, economist at Stanlib.
The South African Reserve Bank “will try and keep rates on hold. They will still discuss a cut, but I think in the end they’ll keep it on hold and hope you get more activity through some of the infrastructure investment.”
The Reserve Bank has left the repo rate unchanged at 5,5% this year, after reducing it by a cumulative 650 basis points in the two years to November 2010.
Consumer spending supported the economy in the third quarter, with the wholesale and retail trade sector rising by 6,1% quarter-on-quarter.
Government bonds firmed after the data, with the yield on the 2015 bond falling to 6,97% from 7,01% before the GDP data was released at 0930GMT.
The rand reversed its earlier gains in the session, but mainly driven by global sentiment.
- Chamisa under fire over US$120K donation
- Mavhunga puts DeMbare into Chibuku quarterfinals
- Pension funds bet on Cabora Bassa oilfields
- Councils defy govt fire tender directive
Keep Reading
It was trading at 8,36 against the dollar from 8,3690 before the data.
Statistics South Africa said on an unadjusted year-on-year basis, economic growth was at 3,1% from an upwardly revised 3,2% in the second quarter. It was a bit higher than expectations of 3%.
