South Africa’s third quarter 2004 gross domestic product (GDP) growth is expected to increased to a median forecast of 4,9% on a quarter-on-quarter (q/q) seasonally adjusted annualised (saa) basis from 3,9% in the second quarter, according to a survey of economists.
The range of forecasts is from 3,8% to 6,2%.
Statistics South Africa (Stats SA) will release the GDP data at 11.30am on Tuesday, November 30. The GDP data is normally released at the end of the second month after the end of the quarter.
South Africa’s total manufacturing production soared by 11.4% q/q saa after a mild 5.9% q/q saa increase in the second quarter. Mining production rocketed up by 18.3% q/q saa in the third quarter from a small 3.2% q/q saa increase in the second quarter.
Economists are not forecasting a double-digit GDP growth rate however as Stats SA last reported such an event in the fourth quarter 1983. This mismatch between monthly production data and real value added GDP growth has been severely criticised as not reflecting how dynamic South Africa’s economy is nor for taking into account how large the informal sector is.
Informal sector retailers sell half of Coca Cola’s product in South Africa, while hawkers buy about 30% of the throughput of fresh produce markets.
Apart from the normal quarterly release, Stats SA will be shifting the base for the national accounts from 1995 to 2000, which entails a massive benchmarking exercise. This is done every five years to keep the data current.
This is why several economists said giving a year-on-year (y/y) change was a meaningless exercise for this data release.
In 1999, the nominal GDP was revised some 14% higher and in May this year, Stats SA said the new business register used to compile the revamped wholesale and retail trade data showed that last year’s nominal sales in the wholesale sector had been under-reported by 17%, while in the manufacturing sector the under-reporting was 20%.
All surveys of businesses conducted by Stats SA draw their frames from its register of businesses. The business register in operation for many years was built from a range of administrative sources.
Realising that those sources were no longer adequately capturing an up-to-date population of businesses of all sizes in all industries of South Africa’s economy, Stats SA has been developing an improved business register.
The new register is based on the value-added tax (VAT) database obtained from the South African Revenue Service (Sars), and so its coverage is all businesses in South Africa registered to collect VAT, on behalf of Sars, on the goods and services they sell.
These encompass businesses with turnover for a 12-month period of R300 000 or more at time of registration, and businesses opting to register in the expectation that they will reach this threshold.
The new business register now provides the sampling frame for all Stats SA surveys of businesses.
Enterprises that conform to the above criteria are included on the new register and hence are given a chance of selection in the new samples for Stats SA surveys.
The coverage of the new register is significantly greater than that of the old register, and its currency is being maintained through information provided by Sars, verified and enhanced by Stats SA’s own investigations.
Work is under way to further enhance the coverage of the business register through access to the income tax records of businesses.
The record quarterly annualised GDP growth rate was 21,7% in the third quarter of 1967, while the highest GDP growth rate in post-apartheid South Africa (since the April 27 1994 elections) was 7,7% in the second quarter of 1996.
There were five double-digit GDP growth quarters in the 1960s, three in the 1970s and only one (fourth quarter 1983 at 10,5%) in the 1980s.
The highest GDP growth rate in post-apartheid South Africa (since the April 27 1994 elections) was 7,7% in the second quarter of 1996. – I-Net Bridge