The gross domestic product (GDP) increased by an annual rate of 4,7% in the third quarter compared to the second quarter of 2006, Statistics SA said on Tuesday.
The real annual GDP increased by 5,1% in 2005 following an increase of 4,8% in 2004.
The main contributors to the increase in economic activity for the third quarter were the finance, real estate and business services industry (1,2 of a percentage point); the wholesale and retail trade, hotels and restaurants industry (0,9 of a percentage point); the manufacturing industry (0,8 of a percentage point); the transport and communication industry (0,5 of a percentage point) and the construction industry and general government sector — each contributing 0,4 of a percentage point.
Dawie Roodt, the chief economist at the Efficient Group said: “Because of the increase in second quarter’s numbers, our number is closer to expectations than if the second quarter number was unchanged. I think the second and third quarter is better than market expectations. It shows the overall economy is still quite strong and robust.”
George Glynos, a market analyst at ETM said the figure was actually a little stronger than it seemed at first because there was a very strong upward revision.
“Clearly the rate hikes have not filtered through yet to the economy and we only expect to see the effects of this in the fourth quarter and the first quarter of
next year.”
Christo Luus, the chief economist at Absa said the numbers were an indication that the demand in the SA economy was still very strong.
“I don’t think the Reserve Bank would be discouraged to hike the interest rate. Interest rate hikes are still very much on the cards.”
Annabel Bishop, an economist at Investec said “GDP growth qqsaa for Q3.06 came out essentially in line with expectations. However, the y/y GDP growth figure for Q3.06 was well above market expectations and somewhat above our forecast. The data does not change our view that interest rates will be hiked by 50bp at the December 2006 MPC meeting.” – I-Net Bridge