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South Africa
Farming helps grow South African economy out of recession
South Africa emerged from a recession in the second quarter as agriculture helped the economy expand more than expected , official gures showed , strengthening the rand and bonds . Africa ' s most industrialised economy grew 2.5 percent in the three months to the end of June , a�er contracting by 0.6 percent in the rst quarter and by 0.3 percent in the nal quarter of 2016 , Statistics South Africa said .
�e rand rmed against the dollar in response to the data , and was trading 0.23 percent rmer at 12.9500 / dollar at 1113 GMT . Government bonds also rmed , with the benchmark paper down 1.5 basis points to 8.5 percent .
Leading the recovery was the agriculture sector , which expanded 33.6 percent in the second quarter as it recovered from last year ' s drought . Mining , manufacturing and trade also registered growth . President Jacob Zuma last month said 2017 growth would be below 0.5 percent , down from a forecast of 1.3 percent in February , a�er the poor rst-quarter numbers . Low growth has piled pressure on Zuma , beset by the fallout from credit downgrades and corruption scandals .
Con dence elusive Gross domestic product rose 1.1 percent on an |
that is still elusive ,” said Standard Chartered Bank ' s Chief Africa Economist Razia Khan . |
unadjusted year-on-year basis in the second |
quarter , compared with a 1.0 percent expansion in the previous three months , the statistics agency said . “ �e growth rate is not what planners and those in decision-making positions would have wanted . Although it ' s not negative , it is not at the level that was planned for ,” said Statistician- General Pali Lehohla . |
“ �e Q2 GDP data demonstrates some momentum in the economy , but this is unlikely to be sufficient to discourage the ( central bank ) from further easing in support of the economic recovery .” �e South African Reserve Bank cut its repo rate by 25 basis points to 6.75 percent in July for the rst time in ve years to support the economy . |
Since South Africa emerged from the 2009 |
recession , growth has fallen short of the government ' s target of 5 percent , the level e c o n o m i s t s s a y i s n e e d e d t o c u r b unemployment . |
Gigaba has pledged to shrink the budget de cit , currently 3.9 percent , to 3.3 percent of GDP by 2019 in an effort to avoid deeper credit downgrades , but economists believe he is unlikely |
“ A restoration of investor con dence remains |
to |
nd the revenue or make the spending cuts |
important for a sustained recovery . For now , |
needed . |
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Finance Minister Malusi Gigaba said in a statement on Tuesday the improved growth gures were encouraging but that it was too early to celebrate . “ We need to remain honest about the major challenges that still face the local economy . Poverty , unemployment , and inequality which are being underpinned by persistent low growth remain the challenge ,” he said .
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