South Africa's economy barely grew in the third quarter of the year as the manufacturing sector contracted sharply, renewing fears that the reprieve from ratings downgrades will only be temporary.
Gross domestic product expanded by only 0.2% in the period between July and September compared with a revised 3.5% in the second quarter, Statistics SA said yesterday.
The rand firmed in response to the release of the data, touching a session high of 13.6400/ dollar from 13.7300/dollar before its release.
On a year-on-year basis the economy grew at 0.7% from 0.6% previously.
The meagre growth in the quarter was led by a 3.2% decline in the manufacturing sector, followed by a 2.8% decline in the electricity sector and a 2.1% contraction in trade and accommodation.
"The decline in manufacturing is very concerning," chief economist at Nedbank Nicky Weimar commented.
Manufacturing now accounts for only 13% of the economy, down from about 25% two decades ago.
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