Economy

Agriculture performs poorly despite 3,1% GDP growth

Agriculture performs poorly despite 3,1% GDP growth”

South Africa has avoided a recession as the economy grew by 3.1% in the second quarter of 2019, data released by Statistics SA showed. Increased production was reported for the mining of iron ore, manganese, coal and "other" metal ores including platinum.

The second quarter's expansion was led by a rebound in the mining industry, which grew by 14.4% compared to a contraction in the previous three months, while the finance industry grew by 4.1%. In the overall emerging market sphere, the MSCI Emerging Market Index (-1.07 percent) traded lower.

This was due to increased economic activity that was reported in all trade divisions except the food and beverages major group, Risenga said. Mining, finance, trade and government services were the main drivers of growth.

In contrast, negative contributions come from the agriculture, forestry and fishing industry and the construction industry decreased by 4.2% and 1.6% respectively, and each contributed -0.1 of a percentage point to GDP growth.

Nedbank maintained a growth forecast for the calendar year at 0.5%.

Manufacturing also grew by 2.1% in the second quarter, while electricity grew by 3.2%.

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General government services increased by 3.4%, mainly attributed to an increase in employment.

Gross fixed capital formation (fixed investment) increased by 6,1% in the second quarter, driven mostly by increased spending on machinery and transport equipment. In local news, Aspen (+7.26 percent) shares vaulted higher after the pharmaceuticals company announced yesterday that its debt for the year ended 30 June 2019 has dipped below R40bn, down from R53.5 billion realised during the same period a year ago. The Ministry noted, however, that a holistic look needed to be taken at the mining industry, beyond the minerals that have been dominant over a long time and which were now declining.

South Africa's rand rose to a three-week high early on Wednesday following a better-than-expected jump in second quarter economic growth, brushing off concerns over anti-immigrant protests locally and the ongoing US-China trade dispute.



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