South Africa avoids recession but economic growth sluggish - CNBC Africa

South Africa avoids recession but economic growth sluggish

Southern Africa

by Reuters 0

Africa's most industrialized economy might not achieve even the sluggish 1.5 percent 2015 growth target. Photo: Flickr.

South Africa's economy grew lower than expected in the third quarter but avoided a technical recession, helped by a recovery in the key manufacturing sector, data from the statistics agency showed on Tuesday.

The numbers however indicated that Africa's most industrialised economy remains under stress, and might not achieve even the sluggish 1.5 percent 2015 growth target set by the National Treasury.

Gross domestic product was up 0.7 percent in the third quarter after contracting 1.3 percent in the three months to June, Statistics South Africa said.

GDP expanded by 1 percent on a year-on-year basis compared with 1.2 percent growth previously, the agency said.

Economists polled by Reuters had expected a quarter-on-quarter increase of 1.1 percent, while GDP was seen rising 1.3 percent compared with a year ago.

The rand initially fell to 14.1500 against the dollar after the data, before recovering to 14.1110 by 1000 GMT.

The third quarter GDP recovery was led by the manufacturing sector, which contributes slightly more than 12 percent to the economy and grew by 6.2 percent. Mining, on the other hand, fell by 9.8 percent while agriculture slid 12.6 percent.

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