By Zinhle Xaba.
@GettyImages.
South Africa’s economic growth beat expectations in the first three months of the year as transport and farming boosted output, helping offset a contraction in manufacturing.
Gross domestic product rose 0.1% in the first quarter, compared with revised growth of 0.4% in the previous three-month period, Statistics South Africa said in a report released on Tuesday. The median estimate in a Bloomberg survey was for a 0.1% contraction.
“When we look at these numbers, our economy is not growing sufficiently enough, so it is easy for it to slide to the negative at any given point,” Statistician-General Risenga Maluleke told reporters in the capital, Pretoria.
Still, the rand edged slightly higher after the news to R17.85 per dollar by 11:41 a.m. in Johannesburg. Yields on 10-year government debt moved down to 10.15%, compared with about 10.2% earlier in the session.
The agriculture, transport and finance sectors were among the biggest contributors to growth during the period, increasing 15.8%, 2.4% and 0.2% respectively. Trade also rose by 0.5%, while manufacturing shrank 2% in the first quarter.
The latest reading delivers welcome news to the country’s governing coalition, after the National Treasury trimmed its growth forecasts for the year to 1.4% from a prior 1.9% amid headwinds from geopolitical tensions including US President Donald Trump’s trade war.
The government has vowed to spur hiring and investment to shore up an economy that’s expanded by less than 1% annually on average over the past decade.
On a year-over-year basis, the South African economy grew by 0.8% in the first quarter, slightly ahead of forecasts for a 0.7% increase.