South Africa emerged from a recession in the second quarter as agriculture helped the economy expand more than expected, official figures showed on Tuesday, strengthening the rand and bonds.
Africa’s most industrialised economy grew 2.5 percent in the three months to the end of June, after contracting by 0.6 percent in the first quarter and by 0.3 percent in the final quarter of 2016, Statistics South Africa said.
The rand firmed against the dollar in response to the data, and was trading 0.23 percent firmer at 12.9500/dollar at 1113 GMT. Government bonds also firmed, with the benchmark paper down 1.5 basis points to 8.5 percent.
Leading the recovery was the agriculture sector, which expanded 33.6 percent in the second quarter as it recovered from last year’s drought. Mining, manufacturing and trade also registered growth.
Finance Minister Malusi Gigaba said in a statement on Tuesday the improved growth figures were encouraging but that it was too early to celebrate.
“We need to remain honest about the major challenges that still face the local economy. Poverty, unemployment, and inequality which are being underpinned by persistent low growth remain the challenge,” he said.
