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The SA Daily 15 November 2018

Recession likely over

  • In the The SA Daily of 09 November, we noted that the mining sector, accounting for 7.1% of GDP, likely contributed negatively to real GDP growth in Q3, and the manufacturing sector, accounting for 12.0%, likely contributed positively. We also noted that monthly data at that time indicated the SA economy likely staging a recovery in Q3.
  • As a follow-on from this, September retail sales data yesterday showed a moderation of 0.7% y/y (Bloomberg consensus: 1.9% y/y), quite a bit less than 2.5% y/y in August. However, seasonally adjusted retail trade sales increased by 1.5% q/q; in Q2:18 there was a 0.4% q/q contraction.
  • The retail trade sector falls under the ‘trade, catering and accomod ation’ category which accounts for around 13.3% of GDP, of which the retail trade sector accounts for around 6.1% of GDP. This implies that the sector therefore likely contributed positively to Q3:18 GDP. This, together with other monthly data, also supports our view that SA in Q3 exited the technical recession of H1:18.

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