Madeleine Wackernagel
GROSS domestic product (GDP) figures for the third quarter were in line with expectations at an annualised rate of 3,2% growth.
This relative decline, after the unexpectedly strong growth in the second quarter of 3,5%, was only to be expected, says Bernie de Jager, head of the Reserve Bank’s economics unit.
“Growth in the second quarter was particularly strong as consumers brought forward their purchases in anticipation of rising prices as the currency tumbled, so we expected a softening in the third quarter.
“But such spending gave rise to artificial growth, which is no longer sustainable with the latest increase in the cost of credit, and lower expectations of income growth.”
Agriculture is up on the last quarter, thanks to a bumper crop of maize, most of which is harvested between June and September. An increase of 54,6% annualised growth was registered, compared with 41,2% last time.
The cause of the decline was manufacturing output, down 0,5% on the last quarter as consumers tightened their belts, and mining which fell 7%, in line with the general decline in gold output this year.
It is not all doom and gloom, however. De Jager says we needed a slowdown to prevent inflation spiralling out of control. The latest evidence of a rise in consumer prices had to be checked, he says, before we’re back to the bad old days of double digits.
With most economists factoring in the third quarter decline, overall growth is still on track for 3% this year, but is seen as slowing dramatically to between 2% and 2,5% next.