South Africa’s GDP grew by 3,2% in the fourth quarter of 2009 on a seasonally adjusted and annualised basis, compared to an expansion of 0,9% in Q3, data showed on Tuesday.
The economy contracted by 1,4% year-on-year unadjusted and shrunk by a provisional 1,8% for 2009.
A Reuters poll of 15 economists last week showed the GDP number was expected to come in at 2,5% on a seasonally adjusted quarterly basis and fall by 1,7% on an unadjusted year-on-year basis.
George Glynos, a market analyst at ETM, told I-Net Bridge that the GDP was a “decent figure”.
“Mining and manufacturing are the key components that drove it higher. Construction also provided a bit of a boost. So it’s fundamentally a case of the primary sectors boosting growth. I suspect that this reflects South Africa’s increased exposure to China.”
Carmen Altenkirch, economist at Nedbank, said the growth in the economy had beaten market expectations.
“The manufacturing sector outperformed other sectors in the economy, growing by 10,1% q-o-q. The manufacturing sector, which exports roughly 30% of domestic production, benefited from the recovery in the global economy as well as strong demand for beneficiated metals from China.
“In contrast, sectors facing the domestic consumer, particularly retail trade as well as finance and real estate continued the lag the recovery, as households remained cautious, even as the supply side of the economy has slowly begun to recover.
“Overall, this year we expected that the economy will grow by 2,4%.”
Freddie Mitchell, economist at Efficient Group: “I am dumbstruck, astounded by that figure. +3,2% is a really good figure and was better than the market had expected. I hadn’t expected that.
“The two main contributing factors were manufacturing and general government, which isn’t really a surprise. Perhaps you could call it an expected, pleasant surprise.”
Annabel Bishop, economist at Investec, said the better than expected GDP outcome closed the door on any further interest rate cuts, and potentially strengthened the chance of the first rate hike, which she predicted as a 50bp hike in October.
“Despite the pick-up in growth a sharp, V-shaped recovery remains unlikely in SA due to its heavy dependence on global demand and the degree of job losses and company failures last
“Further sharp inventory build up was likely, but this cannot be sustained if global demand does not strengthen on a continual basis. We expect to see the demand side lagging the supply side. Without the annualisation effect, GDP actual growth would have been below 1% for the fourth quarter, q/q.” – Reuters, I-Net Bridge