The economy rebounded 3.1% in the second quarter of 2019, escaping a recession as key sectors picked up.

Data released by Statistics SA on Tuesday showed that seasonally adjusted GDP growth expanded 3.1% from a contraction of a revised 3.1% in the first quarter. This was higher than the consensus among 17 economists polled by Bloomberg of an expansion of 2.5% quarter on quarter. 

A recession is determined by two consecutive quarterly contractions but economists also look at year-on-year comparisons in order to gauge performance. GDP growth increased 0.9% year on year.

Trade — which includes retail, motor sales and wholesale — increased 3.9% in the second quarter. The sector is a key indicator of consumer spending, which accounts for about 60% of GDP. 

The mining sector grew 14.4% in the period and the manufacturing sector rose 2.1% — the two industries were badly knocked in the previous quarter as load-shedding disrupted production. 

Despite the rebound in performance in the second quarter, the SA economy still remains constrained with the Reserve Bank revising its annual GDP forecast to 0.6% from 1.0%. 

SA's weak economic performance is putting pressure on government finances due to reduced tax revenue. SA's widening budget deficit is a key issue being flagged by global rating agencies amid a threat to SA's last remaining investment-grade credit rating by Moody's Investors Service.