South Africa’s economy escaped recession in the first quarter and is once again bigger than before the coronavirus pandemic hit, as most sectors grew. Gross domestic product expanded 0.4percent in the three months through March, after contracting a revised 1.1percent in the previous quarter, Statistics South Africa said in a report released in the capital, Pretoria, on Tuesday. That matched the central bank forecast and the median estimate of 16 economists in a Bloomberg survey. The economy grew 0.2percent from a year earlier.

At an annualised R4.61 trillion in the first quarter, GDP is bigger than the last quarter of 2019, before the pandemic struck.

The economy’s lackluster performance was largely due to record power cuts imposed by state power utility Eskom, which is unable to meet demand from its old and poorly maintained plants.

The outlook for Africa’s most-industrialised economy remains bleak.

Calib Cassim the acting chief executive officer of state power utility Eskom, last month warned that the country faces a difficult winter and in a worst-case scenario 8 000 megawatts of electricity may have to be cut from the grid. That would translate into outages for half of every day. Last week, Finance Minister Enoch Godongwana said the daily power outages constituted a “major problem” that will constrain corporate tax revenue.

Tiger Brands, The Foschini Group and Anglo American Platinum are among those whose profits have been eroded by the blackouts. To mitigate the impact, many firms have invested in dieselpowered generators. The central bank estimates that the power they generate costs 133percent more than energy from the municipal grid.

The power cuts, slow structural reforms, political uncertainty and high levels of crime continued to weigh on fixed-investment spending in the quarter. Gross fixed capital formation rose 1.4percent from the previous quarter.

Household spending, which comprises about two-thirds of GDP, rose 0.4percent in the first quarter. It’s likely to face further pressure from persistent inflation and high interest rates that are at a level last seen during the global financial crisis 14 years ago.