South Africa’s economic growth rate quickened to 5,6% in the fourth quarter of 2006 on a seasonally adjusted and annualised basis, compared to 4,7% in the third quarter, official data showed on Tuesday.
The number was well above a forecast from a Reuters poll of economists last week, which saw the economy growing by an unchanged 4,7%.
Statistics South Africa said Africa’s biggest economy expanded by a preliminary 5% for 2006 as a whole — slower than 2005’s two-decade record of 5,1%.
On an unadjusted basis, South Africa’s economy grew by 6,1% compared to the fourth quarter of 2005.
Mike Schussler, an economist at T-Sec, said in reaction: ”I suspect we are likely to get continued high GDP growth in all sectors of the economy outside of agriculture for the next few quarters.
”I suspect it will be good for the JSE. It should be a bit negative for bonds because it means there is room to increase interest rates. In fact, I am surprised by the GDP growth rate given that rates had increased four times by the time the fourth quarter ended. It should be positive for the rand.”
Tebogo, Hlabioa, an economic analyst at Metropolitan Asset Mangers, said it ”quite a good number”.
”It shows that the economy is growing very well. You might find that the construction sector and the turnaround in the manufacturing and mining sector had a positive effect.”
Annabel Bishop, an economist at Investec, said the figure came out well above expectations.
”The data does not change our view that interest rates will be left unchanged for most of this year, with a possibility of a 50bp cut at the October MPC meeting — although a sharp rise in food price inflation pressures due to the current drought would remove the possibility of any Q4.07 interest rate cut.” – Reuters, I-Net Bridge