South Africa’s economy exited its longest recession in the third quarter with the easing of Covid-19 lockdown restrictions, data from Statistics South Africa showed Tuesday.

Real gross domestic product increased at an annualized rate of 66.1 percent, reversing the sharp 51.7 percent fall in the preceding quarter. This was the first expansion after four quarters of contraction and faster than the economists’ forecast of 52.6 percent.

Despite the rebound, the economy was 5.8 percent smaller than it was at the end of 2019.

On a quarterly basis, GDP expanded 13.5 percent in the third quarter, in contrast to the 16.6 percent slump in the second quarter. Economists had forecast a fall of 7.2 percent.

Data showed that manufacturing, trade and mining were the biggest drivers of growth in the third quarter. The manufacturing industry increased at a significant pace of 210.2 percent contributing 16.2 percentage points to GDP growth.

The mining and quarrying industry surged 288.3 percent annually and the trade, catering and accommodation industry increased at a rate of 137 percent.

The expenditure-side breakdown showed that household final consumption expenditure grew 69.5 percent, while government spending rose only 0.7 percent. Gross fixed capital formation advanced 26.5 percent.

Changes in inventories in the third quarter contributed -20.5 percentage points to total growth. Meanwhile, net exports contributed 38.9 percentage points to total growth, mainly the result of a large increase in exports.

The material has been provided by InstaForex Company – www.instaforex.com

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