JOHANNESBURG (Reuters) - South Africa's rand firmed against the dollar on Tuesday after the latest GDP data showed the strongest quarterly growth since late last year, while a local survey pointed to an improvement in business confidence. Expansion in Africa's most advanced, but struggling economy quickened to 1.4 percent on an annualised quarter-on-quarter basis in the third quarter, from 0.5 percent in Q2, Statistics South Africa said. A fourth quarter survey by Rand Merchant Bank and the Bureau for Economic Research showed business confidence climbed back into positive territory for the first time since early 2013. "Investors responded favourably to the better than expected business confidence data," Tradition Analytics said in a note. The research firm however noted that the productive side of the economy remained plagued by structural inefficiencies, most notably, nagging electricity shortages dating back to 2008. The rand was 0.59 percent firmer at 10.9500 per dollar by 1448 GMT, after it had slipped to 11.0160 by market close in New York on Monday. Government bonds however weakened and yields rose, with the benchmark government issue due in 2026 adding 4.5 basis points to 7.785 percent. The rand had earlier retreated slightly after state power utility Eskom said its profits fell 24 percent and that it would need a substantial cash injection to keep the lights on. The ailing energy producer instituted rolling black-outs last Friday and throughout the weekend, and the electricity crunch has been identified as an obstacle to South Africa's growth target of 5 percent.