JOHANNESBURG - The rand rose on Tuesday ahead of economic growth data release for the third quarter ended September, amid renewed demand for risk assets as the United States and China agreed to a temporary trade war truce.
At 8:50am the rand was 0.5% firmer at R13.6225 per dollar after closing at R13.6900 overnight in New York.
Economists expect the third quarter gross domestic product (GDP) data due today to show that South Africa’s moribund economy exited its first recession since 2009 in the quarter. The economy shrank 0.7 percent in the second quarter of the year, following a 2.6 percent contraction in the prior quarter.
Investec economist Kamilla Kaplan said yesterday that a modest rebound in economic activity was expected in the quarter following the technical recession in the first half of the year.
“Specifically, third quarter’s growth is forecast at 1.5 percent quarter-on-quarter seasonally adjusted annualised. The lift in the third quarter GDP growth momentum is, in the main, expected to have been underpinned by positive growth in the manufacturing and trade sectors,” Kaplan said.
The largest negative contributors to second-quarter GDP growth were the agriculture industry, which plunged 29.2 percent, followed by the transport industry, which declined 4.9 percent and trade which decreased 1.9 percent.
Last month Business Report reported that the R290 billion investment that was pledged at the Presidential Investment Summit, as stated by President Cyril Ramaphosa, will add about R338bn to South Africa’s gross domestic product (GDP) over the next five years.
This was revealed in a new analysis conducted by PwC’s Strategy& economists on the potential economic impact of investment pledges made at the SA Investment Conference in October 2018.