SARAH BULLEN, Johannesburg | Monday 5.20pm.
SOUTH AFRICA’S real Gross Domestic Product fell a weighty annualised 2,3% during the third quarter of 1998, compared with the second quarter of 1998, according to the latest figures released by Statistics South Africa on Monday. The figures surprised even the most pessimistic economists, falling way below the market consensus of 1,5% fall.
According to Stats SA this is the sharpest decline since a 2,9% fall in GDP in the first quarter 1994, just prior to the first all-race elections in April 1994. The 2,3% fall compares to a second quarter annualised growth rate of 0,3%.
The third quarter decrease was mainly due to a 5,2% annualised decline in manufacturing, with 5 of the 10 main sectors showing a decline. Agriculture, forestry and fishing fell 19,5% in the quarter, mining and quarrying 2,1% and construction 4,2%, all contributing to the slowdown in GDP growth. These decreases were partially neutralised by positive quarterly annualised growth in the community services sector (1,7%), the transport and communication sector (1,4%) and the finance and real estate sector (1,2%). The general government sector posted unchanged growth.
ING Barings chief economist Kristina Quattek said that the actual GDP figure suggests that import leakages have dominated. She said a worrying feature of the data release is the decline in nominal operating surplus numbers.
The reason for this squeeze appears to be two-fold, she said: firstly rising unit labour cost and secondly the inability of producers to pass on rising costs to retailers as highlighted by the benign nature of producer price inflation. ” The decline in operating surplus suggests a difficult earnings backdrop for 1998 and at least the first half of 1999,” she said.