South Africa emerges from recession

South Africa emerged from its first recession in almost a decade in the third quarter as recoveries in manufacturing and agriculture contributed to an increase in economic growth.

GDP rose by an annualised 2.2% in the three months to September compared to a revised 0.4% contraction in the prior quarter, Statistics South Africa said on Tuesday. The median estimate of economists surveyed by Bloomberg was for growth of 1.9%.

The biggest drivers of quarterly growth were increases in manufacturing output, which rose 7.5%, and agriculture, which surged 6.5%.

Despite the rebound, the underlying economy remains weak, with the central bank and national treasury forecasting annual growth of less than 1% for the year.

The economy hasn’t grown by more than 2%/year since 2013 and is struggling to gain momentum despite political changes, which boosted investor confidence.

Cyril Ramaphosa’s ascent to power — first as leader of the ANC in December and as president in February — bolstered sentiment and the rand following Jacob Zuma’s scandal-ridden tenure of almost nine years, but indexes show confidence has waned as businesses seek real reforms. The economy expanded 1.1% from a year earlier.

The rand gained as much as 1.1% before paring the advance to trade 0.9% up at R13.56/US$ by 1pm in Johannesburg, the strongest level in almost four months. Yields on benchmark government bonds dropped and stocks reversed losses.  — Reported by Prinesha Naidoo and Amogelang Mbatha, with assistance from Robert Brand and Simbarashe Gumbo, (c) 2018 Bloomberg LP