Pretoria - South Africa’s economic growth slowed in the
first quarter of 2012, hit by a sharp contraction in mining, but manufacturing
showed surprising resilience, suggesting the Reserve Bank might not need to cut
interest rates to stimulate output.
The economy grew by 2.7% quarter-on-quarter on a seasonally
adjusted and annualised basis in Q1, surpassing analysts’ forecasts of 2.4% and
compared with a 3.2% rise in the fourth quarter of last year, Statistics South
Africa said on Tuesday.
On an unadjusted year-on-year basis, economic growth was at
2.1% in Q1 from 2.9% in the fourth quarter.
A Reuters poll of 12 economists last week forecast
quarter-on-quarter growth of 2.4% in Q1 while year-on-year expansion was seen
“Better than what most people were looking for. The surprise
would be manufacturing being as strong as it was simply because we saw quite a
shock number for the March number so clearly it wasn’t quite as badly as
impacted,” said Kevin Lings, chief economist at Stanlib.
“We know mining was weak because of all the closures and
strike activity, especially around platinum. The other sectors held up
reasonably well especially manufacturing.”
The mining sector shrank by 16.8% during the quarter but
factory output, which accounts for about 15% of GDP, was up 7.7%.
Economic growth remains hesitant after the continent’s
largest economy came out of its first recession in nearly two decades in 2009.
The central bank last week said the risks posed by Europe,
which absorbs a quarter of South Africa’s exports, has “intensified” since its
previous monetary policy meeting.
The bank opted to leave interest rates at a 30-year low of
5.5% last week as expected to try and support the economy, even as inflation
remains at the upper end of its target range.
The central bank cut its 2012 growth forecast slightly to
2.9% from 3% previously, while the International Monetary Fund and the Finance
Ministry expect 2.7% growth.