SA's GDP expanded by 3.10%

Marco Green
March 6, 2018

Stats SA reported on Tuesday that country's GDP growth exceeded National Treasury's expectation of 1.0% growth announced during the National Budget Speech in February previous year, and shot far past market expectations which ranged from 0.2% to 0.8%.

South Africa's economy grew more than expected at the end of past year as agriculture and trade recovered, data showed on Tuesday, boosting its chances of avoiding a potentially debilitating credit ratings downgrade.

South Africa's rand and government bonds firmed on Tuesday after data showed the economy expanded more than expected at the end of past year, while stocks also ended the session higher as food company Tiger Brands recovered from three-month lows.

According to macroeconomics website Trading Economics, GDP Annual Growth Rate in South Africa averaged 2.83 percent from 1994 until 2017, reaching an all-time high of 7.10 percent in the fourth quarter of 2006 and a record low of -2.60 percent in the second quarter of 2009. It can be added that the Rand reacted positively to the data announcement, strengthening by 0.85 percent against the dollar at the time of writing today. Government bonds ZAR186= also firmed.

Finance Minister Nhlanhla Nene said on Monday that growth forecasts were likely to be raised in October's medium-term budget as the government completes reforms to boost growth and stabilize ailing state companies.

In April, the country lost its investment grade credit rating when the world's two major agencies, Fitch and Standard & Poor's, downgraded its sovereign debt to junk status.

The agriculture industry registered the highest growth at 37.5 percent, although the expansion was slower than in the third quarter when the sector grew 41.1 percent.

Last year, manufacturing and the agricultural sector recovered, helping pull the country out of a recession.

The economy grew by 1.3 percent in 2017 compared a revised h 0.6 percent in 2016, the agency said.

Other reports by Click Lancashire

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