Johannesburg, Thursday 06 December 2018 – As the country is on a path towards economic revival and seeing investor and business confidence improving significantly. Brand South Africa welcomes the news that the country is no longer in recession and is anticipating a decrease in the fuel price ahead of the December holiday season.
Statistics South Africa this week released the third quarter of Real Gross Domestic Product (GDP) figures, which reflected a growth of 2.2%. This means that the country’s second recession has ended. The main driver of positive growth in the third quarter is notably the manufacturing industry. The industry grew by 7,5%2, largely as a result of increased production of basic iron and steel, metal products and machinery; wood and paper; petroleum products; and motor vehicles. This is the largest jump in manufacturing production since the second quarter of 2016.
Key facts from the third quarter 2018 GDP release:
- Expenditure on GDP increased by 2,3% in the third quarter of 2018.
- Gross fixed capital formation fell by 5,1% in the third quarter, largely as a result of declining investment in construction works, transport equipment, and non-residential buildings.
- Households spent more on food, beverages and household furnishings in the third quarter, driving up household final consumption expenditure by 1,6%.
- Unadjusted real GDP (measured by production) was up by 0,8% in the first nine months of 2018, compared with the first nine months of 2017.
It is also important to take note of the number of initiatives the government has implemented to boost economic growth and job creation. In the manufacturing sector, government has finalised the Framework for Short-Term Negotiated Pricing Agreements on electricity and will expedite implementation. While in the construction sector, the economic stimulus package identified infrastructure spending as a critical lever to economic activity.
The stimulus package places an emphasizes on the following:
- Expanding and maintaining infrastructure to create jobs and attract investment.
- Establishing a South African Infrastructure Fund.
- Establishing a dedicated Infrastructure Execution Team.
- Unlocking infrastructure spending in identified 57 priority pilot municipalities
In addition, government also acknowledges the structural weaknesses in the economy and has initiated measures to create jobs which will complement the current commitments made in the Medium Term Strategic Framework. These include interventions agreed to at the Job Summit, commitments made during the Investment Summit and the Economic Stimulus and Recovery Plan.
A total of 102 Black industrialists’ projects were funded by the Department of Trade and Industry and other government funding agencies with a total investment of R8.3 billion. This has created over 18 000 direct jobs and 18 000 indirect jobs.
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