S. Africa's economy contracts by 0.6 pct in Q3

Source: Xinhua | 2019-12-04

South Africa's gross domestic product (GDP) growth rate decreased by 0.6 percent in the third quarter of 2019, Statistics South Africa (Stats SA) said on Tuesday.

The largest negative contributors to growth in GDP in the third quarter were the mining, manufacturing and transport, storage and communication industries, the agency said.

The mining and quarrying industry decreased by 6.1 percent, contributing -0.5 percentage point to GDP growth. Decreased production was reported for mining of PGMs (platinum group metals), coal and iron ore.

Manufacturing industry decreased by 3.9 percent, contributing -0,5 percentage point to GDP growth. Decreased economic activity was reported in basic iron and steel, non-ferrous metal products, metal products and machinery; and petroleum, chemical products, rubber and plastic products.

Transport storage and communication industry decreased by 5.4 percent, contributing -0.5 percentage point to GDP growth. Decreased economic activity was reported for land transport and transport support services.

The electricity, gas and water industry contracted by 4.9 percent in the third quarter, largely due to a decrease in electricity distributed.

The largest positive contributions to GDP growth came from trade, catering and accommodation, finance, real estate and business, and general government services.

The trade, catering and accommodation industry increased by 2.6 percent, contributing 0.4 percentage point to the GDP growth.

Finance, real estate and business services increased by 1.6 percent contributed 0.3 percentage point to GDP growth.

General government services increased by 2.4 percent, mainly attributed to increased employment in provincial government and higher education institutions.

In the second quarter of the year the economy grew by 3.1 percent, after shrinking by 3.2 percent in the first quarter.

South Africa's economic growth for 2019 has been hampered by constant load shedding, weak business confidence, policy uncertainty and struggling state-owned enterprises such as electricity utility Eskom and South African Airways.

In mid-November South African Reserve Bank lowered the country's projected economic growth rate for 2019 from 0.6 percent to just 0.5 percent.