Economic activity in the country continued to rise, with an increase of 2,2% in the Gross Domestic Product in the first quarter of the year compared to the previous quarter, Statistics South Africa (Stats SA) reported on Tuesday.
This followed annualised growth rates of 1,5%; 1,8%; 1,2% and 2,5% in the four quarters of last year, it said.
”The main contributors to the increase in economic activity for the first quarter of 2002 were the finance, real estate and business services industry (up 3,5%); transport and communication industry (up 4,8%), and manufacturing industry (up 2,8%),” Stats SA said in a statement.
The agriculture, forestry and fishing industry, which has shown negative growth since the fourth quarter of 2000, rose by 4,5% in the first quarter of this year. This could be mainly attributed to good performance of field crops, Stats SA said.
Growth was recorded in all sectors except for general government services, which dropped by 0,2%.
Absa believes economic growth could accelerate to above three percent in 2002, propelled by export demand from the stronger global economy, generous tax cuts in the February budget, and increased government spending.
But other analysts are concerned about the impact of two interest rate hikes of 100 basis points each so far this year, which took prime lending rates set by commercial banks to 15%.
The Reserve bank is expected to raise its key repo rate by another 100 basis points at its June 12-13 meeting. Its governor Tito Mboweni told two business gatherings last week that he would vote for an increase of more than 50 basis points.
”When it comes to interest rates it’s not a motivating factor for the central bank to be hiking interest rates. We need to be growing the economy,” Brait economist Colen Garrow said.
Growth in South Africa’s economy is respectable by standards in the developed world but lags that of other emerging markets.
Faster growth is seen as vital to attracting the foreign direct investment needed to create employment in a country with an official jobless rate of around 30%. – Sapa, Reuters