Economy grows by 2.5 per cent, stops technical recession

The largest positive contributor to growth in GDP in the second quarter was the agriculture, forestry and fishing industry. Photo: File

After two consecutive quarters of decline, the South African economy spluttered back to life in the second quarter, lifting the country out of a technical recession.

This was announced by statistician general, Pali Lehohla on 5 September in Pretoria.

South Africa’s gross domestic product (GDP) growth rate was 2,5 per cent in the second quarter.

“The largest positive contributor to growth in GDP in the second quarter was the agriculture, forestry and fishing industry, which increased by 33.6 per cent and contributed 0.7 of a percentage point to GDP growth,” Lehohla said.

“Finance, real estate and business services increased by 2.5 per cent and contributed 0.5 of a percentage point to GDP growth. The mining and quarrying industry increased by 3.9 per cent and contributed 0.3 of a percentage point to GDP growth.”

In contrast, general government services decreased by 0.6 per cent and contributed -0.1 of a percentage point to GDP growth.

Statistics South Africa said the country was on track for record-breaking maize crops if production continued at estimated levels, according to figures from the Crop Estimates Committee.

“The bumper crop has already provided some relief for cash-strapped South African households,” it said. “Higher stocks of maize and wheat have begun to dampen prices, with bread and cereal prices falling month-on-month for six consecutive months, according to Stats SA’s most recent consumer price figures.”

It also reminded that even though 2.5 per cent might seem like an impressive recovery, longer-term indicators show subdued growth.

“As a nation, the goal of achieving and sustaining higher rates of economic growth and development remains just as important as ever.”

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Chantelle Fourie

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