On an unadjusted year-on-year basis, economic growth was at 2,3% in the third quarter from a revised 3,1% in the second quarter.
A Reuters poll of 15 economists expected growth to have slowed to 1,5% in the third quarter because of strikes in the mining sector.
PETER ATTARD MONTALTO, EMERGING MARKET ECONOMIST, NOMURA
“It would appear mining was roughly on forecast so the surprise came from other segments most likely effected by the transport workers strike and petrol shortages more than we had expected.
“Overall today’s number probably won’t meaningfully surprise the MPC (central bank monetary policy committee) enough yet to get a cut in January without more international growth shock evidence.
“Given the revision up to the previous quarter on quarter number the amount of surprise here is limited really and shows the economy slowing but with mining a small part of the economy in volume terms the impact of the strike in first round effects remains limited.
“It is the wider second round effects on sentiment and FDI (foreign direct investment) that we have to wait for into next year that can ultimately prompt the MPC into a cut.”
— Recovery in Africa’s largest economy has been hesitant since a 2009 recession. The central bank cut interest rates by 50 basis points in July to help support economic growth.
— A festering debt crisis in Europe, which takes in a quarter of South Africa’s exports, is weighing on domestic growth prospects.
— Three months of violent strikes in the mining sector have also put an added drag on prospects for growth.
— The Finance Ministry and the central bank cut growth projections to 2,6% this year, in line with the IMF.
— The ministry has said the economy needs to grow by 7% on a sustained basis to make a dent on a 25% unemployment rate.