JOHANNESBURG - South Africa's economic growth data for the rest of the year is likely to be disappointing, with only two of 14 indicators assessed in order to gauge the health of the economy showing improvement during the third quarter, professional services company PwC said on Monday.
In a report issued on the eve of Statistics South Africa releasing Q3 gross domestic product numbers, PwC said its assessment was in line with a warning from the South African Reserve Bank in November that indicators suggested economic activity would remain weak for the rest of the year.
The economy, which has languished below one percent annual growth over the past decade, expanded by 3.1 percent quarter-on-quarter in Q2, allowing South Africa to ward off a technical recession after a contraction in the first quarter.
But PwC said a look at the recent quarter-on-quarter and year-on-year growth data for industries covering around three quarters of the South African economy pointed to further gloom.
Out of the 14 indicators, only two - wholesale trade and civil construction confidence – showed improvement during the third quarter.
"This sends a clear warning that GDP data for the third quarter will be disappointing – and most likely in the fourth quarter as well," it said.
Retail sales were weighed down by weak consumer confidence, rising unemployment, slow wage growth and rising administered prices, while electrical distribution declined after state power utility Eskom increased power tariffs in July, PwC noted.
Despite below-inflation increases in vehicle prices and a reduction in interest rates during July, sales volumes remained under pressure in Q3 from weak business and consumer confidence, with many South Africans deciding to delay car purchases.