South African economy likely to slowdown coming quarters

The manufacturing industry in South Africa recorded its first positive contribution this year, after posting negative growth for two quarters. Finance and real estate also showed sign. Due to low commodities prices, the primary sector like mining and quarrying, agriculture and forestry are showing sluggish growth rate.

The economic activity expanded by 0.7% quarter on quarter in Q3 against negative growth of 1.3% in Q2. This indicates, the economy escaped a recession. The preliminary GDP data indicates that the economy grew at an annualized rate of 0.7% q/q, or 1.0% y/y in Q3. 

The poor performance of mining and quarrying sector, and lower commodity prices still continue. Therefore, the economic activity in South Africa is expected to stay weak in the coming quarters, states Nordea Bank.