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SA exits recession in 2nd quarter, but is it enough?

SA exits recession in Q2, but is it enough?

“The reality is the economy, which is set to grow at just 0.5% this year, is growing too slowly to increase the level of per capita income for the 30.4 million people living below the poverty line,” he said in reaction to the figures released today (Tuesday) by statistician general, Pali Lehohla.

Maynier said a “fundamental shift in economic policy” was needed to boost economic growth and create jobs in South Africa.

Economists are also not overly enthusiastic about the growth, with Argon Asset Management economist Thabi Leoka highlighting in a report by Business Day that the improvement would not have a significant effect on the economy.

“It is still low growth … We have been flirting with a recession since 2016, so coming out of it doesn’t mark much of a change. We still have weak confidence levels, poor private sector investment and the employment numbers point to an economy that is still struggling.

“Importantly, it will not put us in a better light with credit rating agencies. The second quarter is just one figure in a year forecast to have very low growth,” she said.

Lehohla pointed out that the 2.5% growth was an improvement from the contraction reported for two consecutive quarters. GDP declined 0.3% in the fourth quarter of 2016 and 0.7% in the first quarter of 2017.

He said explained that the primary industry contributed “significantly” to the growth numbers, with growth of 10.3%, describing growth in the agricultural sector as “shooting through the roof” by 33.6%. Mining grew by 3.9%, contributing 0.3 of a percentage point to overall growth.

The secondary sector grew 1.9%, with growth in the manufacturing industry up 1.5%. The tertiary sector reported growth of 1.2%, with trade up 0.6%, transport up 2.2% and finance up 2.5%.

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