PRETORIA – South Africa’s economy grew more than expected in the third quarter as agricultural sector continued to recover from a severe drought while mining and finance also improved, lifting hopes the country may avoid further credit downgrades.
Last month S&P Global Ratings cut Pretoria’s local currency debt to “junk” status, citing a further deterioration in the country’s economic outlook and public finances. Moody’s placed South Africa on review for a downgrade.
Africa’s most industrialised economy expanded 2 percent in the three-months to the end of September after its second quarter growth was revised to 2.8 percent.
Economist polled by Reuters had expected quarterly growth of 1.5 percent.
The rand inched firmer after the data, advancing 0.1 percent to 13.5100 per dollar at 1000 GMT.
Farming led the way with 44.2 percent quarterly growth, while major sectors of mining, manufacturing and financial services also showed steady growth.
“In agriculture the increase was largely driven by production of field crops as well as products in the horticulture environment,” the country’s new Statistician General Risenga Maluleke said.
The growth in the second quarter lifted the country from its first recession in nearly a decade. The economy had contracted 0.6 percent in the first three months of the year, following a 0.3 percent easing in the last quarter of 2016.(Reuters)