MARIAM ISA, Pretoria | Tuesday
SOUTH Africa’s economy grew more slowly than expected in the third quarter of 2000, but sweeping revisions to official data released this week showed the economy was stronger than many had believed.
Gross domestic product (GDP) grew by 3.8% between July and September compared with the previous quarter, well below forecasts of a 4.7% increase, the data from Statistics South Africa showed.
But this was mainly because second quarter growth was revised up to 2.8% from 1.6% before, based on new information from surveys, companies and the central bank.
Estimates for each of the past ten quarters were also substantially revised, with growth in 1999 revised up to 1.9% from 1.2% previously.
South African markets shrugged off the data, which economists said were unlikely to have an impact on the interest rate outlook. But some said they pointed to faster growth in 2000 than the government’s latest 2.6% forecast.
”These new data and revisions, combined with sensible growth forecasts for Q4, now leave South Africa on track for real GDP growth of about 3.2% in 2000,” said JP Morgan economist Peter Worthington.
South African economists are divided on the outlook for interest rates, with some predicting more rate hikes after a small surprise increase in October aimed at dampening the inflationary impact of the weak rand and high oil prices.
But most analysts see scope for rate cuts once the purely external factors driving price pressures disappear, to boost sluggish growth to the levels needed to bring down unemployment levels hovering above a punishing 30%.
Most of the acceleration in growth during the third quarter was due to the impact which a bumper maize crop – delayed by floods early in the year – had on agriculture, which surged by an annualised rate of 24.1% during the quarter.
But the contribution from the finance, real estate and business sector was not far behind, while the manufacturing and retail sectors were also key drivers of growth.
Compared with the same quarter in 1999, the economy grew by 4.5% – well up on forecasts of 2.7%. – Reuters