The News
South Africa’s economy unexpectedly shrank in the third quarter of this year, driven by a weak performance in the agricultural sector.
Gross domestic product dropped 0.3% on a quarterly basis, South Africa’s statistics office said on Tuesday.
The agriculture sector’s near 29% contraction was due to the effect of drought on maize, soya beans, wheat and sunflower outputs, as well as on fruits and vegetables. The transportation and trade sectors also contracted, depressing the overall growth picture.
Know More
The performance was “against expectations of a modest expansion,” Goldman Sachs said in a note.
It’s an outcome that is “incrementally dovish for South Africa’s rate prospects and increases our conviction in consecutive rate cuts at the next two [monetary policy committee] meetings,” the bank’s economics research note said.