The Economy Expanded 2.5 Per Cent In The Three-Months To The End Of June.

South Africa emerged from a recession in the second quarter as agriculture helped the economy expand more than expected, Statistics South Africa said on Tuesday.

Statistician-General Pali Lehohla said in Pretoria that the economy expanded 2.5 per cent in the three-months to the end of June after contracting by 0.6 per cent in the first quarter and by 0.3 per cent in the final quarter of 2016.

Mr. Lehohla said: “The growth rate is not what planners and those in decision making positions would have wanted.’’

“Although it’s not negative, it is not at the level (of growth) that was planned for,” he said.

According to Mr. Lehohla, helping the recovery is growth in agriculture with the sector expanding 33.6 per cent as it recovers from last year’s drought.

“The other key sectors of mining, manufacturing and trade also registered growth.’’

Gross domestic product rose 1.1 per cent on an unadjusted year-on-year basis in the second quarter, compared with 1.0 per cent expansion in the previous three months,” he said.

The rand firmed against the dollar in response to the data, and was trading 0.23 per cent firmer at 12.9500/dollar at about noon.

Government bonds also firmed with the benchmark paper down 1.5 basis points to 8.5 per cent.

President Jacob Zuma last month said that 2017 growth would be below 0.5 per cent, down from a forecast of 1.3 per cent in February, after the poor first quarter numbers.

Low growth has piled pressure on Zuma, who has been beset by the fallout from credit downgrades and corruption scandals that have further dented investor’s confidence.

Economists polled by Reuters had expected a quarter-on-quarter GDP expansion of 2.1 per cent and a year-on-year expansion of 0.4 per cent.

Since emerging from the 2009 recession, South African growth has fallen short of the government’s 5 per cent target that economists say is needed to curb unemployment.

“A restoration of investor confidence remains important for a sustained recovery. For now, that is still elusive,” Razia Khan, Standard Chartered Bank’s Chief Africa Economist, said.

“The Q2 GDP data demonstrates some momentum in the economy, but this is unlikely to be sufficient to discourage the (central bank) from further easing in support of the economic recovery.”

The South African Reserve Bank cut its repo rate by 25 basis points to 6.75 per cent in July for the first time in five years in order to support the economy.

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