“Following the negative growth rate recorded in the first quarter of 2014, the South African economy escaped a further contraction in the second quarter as real domestic production rose at an annualised rate of 0.6 per cent,” read the statement.
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The country’s central bank attributed the muted growth to strikes in the Rustenburg platinum belt.
“This barely positive growth rate was extremely disappointing given the country’s development needs, and was mainly brought about by the drawn-out industrial action in the platinum-mining subsector which started on 23 January 2014 and only came to an end five months later,” added the bank.
“The strike activity, which resulted in a sharp contraction in mining output in the first quarter of the year, led to a further but less drastic decline in real mining production in the second quarter of 2014 as the real output of platinum group metals registered a pronounced decline.”
The bank also noted that increased expenditure especially as a result of elections helped to accelerate growth.
“Growth in general government’s real final consumption expenditure accelerated slightly in the second quarter of 2014, partly on account of additional expenditure incurred with the national and provincial elections held in May.”
The bank also noted reduced capital outlays in the private sector adding that the most pronounced declines were registered in the mining, trade, construction, transport and personal services sectors.
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The report explained that government and the non-financial public corporations continued to incur more expenditure than their current revenue as they aligned their infrastructure and other programmes with the targets set out in the National Development Plan.