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The SA Daily 09 November 2018

Q3 GDP likely recovered

Shireen Darmalingam

  • Mining and manufacturing for September production now sheds more light on Q3 GDP. Mining production contracted 1.8% y/y, after contracting 6.7% y/y (previously -9.1% y/y) in August; Bloomberg consensus was for a contraction of 3.4% y/y. Manufacturing production increased 0.1 y/y, after rising by an upwardly revised 1.5% y/y (previously 1.3% y/y) in August; Bloomberg consensus was for an increase of 1.9% y/y.
  • The mining sector accounts for 7.1% of GDP and likely contributed negatively to real GDP growth in Q3. Although the mining sector’s contribution is expected to be negative, the manufacturing sector accounts for 12.0% of GDP and likely contributed positively to real GDP growth in Q3. In general, the monthly data thus far seems to indicate that the SA economy staged a recovery in Q3.
  • Growth this year has faced weak business confidence, stagnant employment, an uncertain global economy, and weaker SA terms of trade. However, we pencil in a robust GDP rebound for Q3, after the contractions in both Q1 and Q2, in order to achieve our 0.9% 2018 forecast.

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