South Africa’s economy grew faster than expected in the third quarter, avoiding a recession despite record load shedding.
The economy expanded by 1.6% in the three months to September 30, after contracting by 0.7% in the previous quarter due to the KwaZulu-Natal floods.
A technical recession is defined as two consecutive quarters of a shrinking economy, but South Africa avoided this by growing in the third quarter, despite load shedding on more than half of the days in the second quarter, as well as skyrocketing interest rates and food and fuel prices.
The 1.6% growth rate was significantly higher than expected. Bloomberg polled economists and found that the median forecast for growth was 0.4%.
Quarterly real GDP of R1.16 trillion (at constant 2015 prices) is now the highest it has ever been, surpassing the previous high of R1.15 trillion in the fourth quarter of 2018, according to Stats SA.
Between the second and third quarters, eight of South Africa’s ten industries expanded, with agriculture, forestry, and fishing increasing by more than 19%. “This was mainly associated with a rise in the production of field crops and horticulture products,” Stats SA reported.
The largest industry in South Africa, finance, real estate, and business services, grew by nearly 2%. The manufacturing industry grew by 1.5% in the third quarter, with seven of the ten manufacturing divisions reporting growth. The manufacturing of motor vehicles, parts and accessories, and other transport equipment division contributed the most in the third quarter.
In the third quarter, South African exports increased by 4.2%. Unadjusted real GDP was 2.3% higher in the first nine months of 2022 than in the same period in 2021.
