Economy braces for more bad news

The weak state of the SA economy is likely to be confirmed this week by a slew of important data releases. Most significant will be the third-quarter GDP growth numbers, with some economists fearing that SA is about to suffer another quarterly contraction.

Real GDP growth rebounded to 3.1% quarter on quarter in the second quarter — a huge turnaround from the first quarter’s 3.1% contraction when load-shedding and strikes took a heavy toll. This has raised the statistical base going into the third quarter, making it harder for the economy to sustain an upward trend.

Given the 6.4% contraction in mining and the 3.8% contraction in manufacturing during the third quarter, coupled with zero retail sales growth (which accounts for about a third of household consumption), fears are high that third-quarter GDP growth could be nearly zero, or even negative.

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