Improvement in the trade and industrial sectors is likely to have lifted the economy out of a recession in the second quarter of 2017, figures from Statistics SA are expected to show this week.
But economists expect weak consumer confidence and real wage growth will make this a short-lived recovery.
After entering a technical recession — two consecutive quarters of negative economic growth – in the first three months of 2017 economists expect GDP to rebound by 2%.
FNB has forecast 2.1% growth in the second quarter compared with a 0.7% contraction at the start of 2017.
GDP is likely to be the main economic data this week. Statistics SA will publish GDP figures on Tuesday.
FNB senior economist Mamello Matikinca said there was a strong rebound in retail sales in the second quarter.
"We anticipate the sector to be the main contributor towards GDP growth."
In comparison, Investec also expected a 2.1% quarter-on-quarter improvement. But NKC African Economics predicted a 2.9% recovery in the period.
The shock of the contraction in the first quarter was its broad-based nature, with all sectors declining on a quarterly basis, except for mining and agriculture.
NKC African Economics economist Elize Kruger said: "It was clear the pain had migrated from the primary and secondary sectors, to which it had initially been limited, to the traditional growth engine of the economy, the tertiary sector."
However, economists are concerned that on an annual basis the recovery is even weaker. Kruger forecast 0.6% growth compared with the second quarter of 2016.
"[It] provides us with a clue that all is not well in SA Inc."
Matikinca, who predicted a 0.4% year-on-year recovery, said while a shallow interest rate cutting cycle may provide some relief to consumers in the near future, "we nonetheless expect the recovery to be short-lived given just how weak consumer confidence and real wage growth is".
Investec economist Kamilla Kaplan said risks to the forecast stem mainly from the financial sector, which comprises more than 20% of the economy and experienced its first contraction in activity since the 2008-09 recession. But little high-frequency data to provide more timely indications of the performance of the sector made it difficult to determine the extent of its recovery.
"The rebound in GDP in the second quarter will partly be a function of low statistical base factors, with underlying activity still relatively suppressed for the year as a whole GDP is forecast to average only 0.5% year on year compared to 0.3% year on year in 2016."
On Tuesday, the Standard Bank purchasing managers index, reviewing confidence across the economy in August, will be published. It will be followed by the South African Chamber of Commerce August business confidence survey on Wednesday.
On Thursday, Statistics SA will publish manufacturing and mining data for July. Higher commodity prices would have catalysed growth in the mining sector, which is expected to have expanded by as much as 6.5% quarter on quarter. But strikes and policy uncertainty may dent the recovery.
Other data expected this week include the Reserve Bank’s publication on Tuesday of the balance of payments of global trade in goods and services position and the gold and foreign exchange reserves on Thursday.
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