South Africa’s real gross domestic product (GDP) at market prices on a quarter-on-quarter (q/q) seasonally annualised and adjusted (saa) basis rose by 4,9% in the second quarter of 2006 from a revised 4% (4,2%) in the first quarter of 2006, Statistics South Africa (Stats SA) said on Tuesday.
The real growth rate of the South African economy was expected to have increased to 4,3% on a quarter-on-quarter (q/q) seasonally adjusted annualised (saa) basis during the second quarter of 2006 from 4,2% q/q in the first quarter, according to a consensus of 11 economists surveyed by I- Net Bridge.
Colen Garrow, an economist at Brait said: “I am actually speechless — I didn’t think that it would come in that high — and mine was one of the more optimistic forecasts.
“It is a good figure and I think it will give the Reserve Bank some more ammunition to maintain its higher interest rate cycle. It also shows how responsive the supply side of the economy can be at the hint of a weaker rand.
“The challenge will be to maintain this path.”
Dawie Roodt, chief economist at the Efficient Group said: “Wow! This is a surprise.”
“We will have to analyse the numbers but I suspect that demand is much stronger than what we’ve anticipated. I also suspect the manufacturing side is quite strong. It looks like interest rates are going to go up further. But this is good news for the JSE.
Mike Schussler, an economist at T-Sec said he was particularly pleased by the GDM numbers.
“I think the concerns about South Africa’s growth are over-exaggerated although one would expect some slowdown in the growth numbers towards the latter half of the year. But we can still expect over 4% growth this year. The number should be good for the stock market and relatively okay for the rand and bonds.”
Annabel Bishop, an economist at Investec said GDP growth qq saa for Q2.06 had come out well above expectations.
“However, the y/y GDP growth figure for Q2.06 was well below both expectations and the Asgisa target and does not change our view that interest rates will remain on hold for the rest of 2006.” – I-Net Bridge