By Olivia Kumwenda-Mtambo
The positive data is a boost for President Cyril Ramaphosa, who has pledged to re-start growth after a decade of stagnation under his predecessor, Jacob Zuma.
South Africa's economy expanded 2.2 percent in the third quarter from the second, snapping out of recession after a revised 0.4 percent contraction in the previous quarter, data from Statistics South Africa showed.
The rand added to early gains, advancing to a session-best 13.5600 per dollar at 0935 GMT from an open at 13.6150.
The economic expansion will also ease fears of credit downgrades deeper into non-investment territory following warnings by agencies about the economy. All of the top three ratings firms have cited weak growth as a major threat.
Economists polled by Reuters had predicted a 1.6 percent expansion.
Manufacturing expanded 7.5 percent, agriculture grew 6.5 percent. Mining contracted 8.8 percent, however.
Last month, the central bank cut its 2018 growth forecast to 0.6 percent, a touch lower than Treasury's 0.7 percent forecast in the October budget.
Analysts said they expected the recovery to continue into 2019, but that recent electricity outages by ailing power utility Eskom posed a threat.
Eskom implemented a sixth day of controlled power cuts on Tuesday, putting more strain on the economy and raising fears of the blackouts a decade ago that reduced GDP by about 1 percent.
"In all, the data confirms our view that the South African economy is recovering," said chief Africa economist at Standard Charted Razia Khan. "Renewed load shedding is a source of downside risk."
An analyst at NKC African Economics Elize Kruger said: "The result was in line with our forecast of 2 percent quarter-on- quarter, which is good news and also means the 0.7 percent growth forecast for full-year is still on track."
(Additional reporting by Nomvelo Chalumbira, writing by Mfuneko Toyana, editing by James Macharia, Larry King)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)