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Pretoria - South Africa’s economy grew by 4.8% in the first quarter of 2011 on a seasonally adjusted and annualised basis, compared with a revised 4.5% expansion in the fourth quarter of 2010, data showed on Tuesday.
On an unadjusted year-on-year (y/y) basis, the economy expanded by 3.6% from 3.8% in the fourth quarter.
A Reuters poll of 20 economists last week forecast economic growth slowing to 4.2% in the first quarter and 3.6% on a y/y unadjusted basis.
The main contributors to the increase in the first quarter were manufacturing with 2.2 percentage points; the finance, real estate and business services with 1.0 percentage point; the wholesale, retail, motor trade and accommodation industry with 0.5 of a percentage point; and the transport, storage and communication industry with 0.3 of a percentage point.
The construction industry contributed 0.0 of a percentage point for six consecutive quarters.
Gina Schoeman, senior economist at Absa Capital, said the figure was above the consensus forecast and, as expected, manufacturing added the most to first-quarter gross domestic product (GDP) numbers.
“It doesn’t change our view that monetary policy will start tightening in the first quarter of next year, simply because we think that although the manufacturing sector is recovering it is still not above pre-crisis levels. The construction sector also did not add anything to GDP in the first quarter which suggests that investment remains very slow,” she said.
The economy came out of recession in the third quarter of 2009 but the recovery has been sluggish, with high frequency data suggesting both consumer expenditure and output levels were still not at pre-recession levels.
Partly due to the slow recovery, the central bank has kept interest rates at 30-year lows this year, leaving the repo rate at 5.5% after cutting it by 650 basis points in the two years to December 2010.
The National Treasury expects growth at 3.4% for 2011, only a fraction of the 7% the government has said is needed to create jobs. The economy continued to shed jobs in the first quarter of this year, suggesting the government is going to have a hard time meeting its target of creating 5 million jobs by 2020.
On an unadjusted year-on-year (y/y) basis, the economy expanded by 3.6% from 3.8% in the fourth quarter.
A Reuters poll of 20 economists last week forecast economic growth slowing to 4.2% in the first quarter and 3.6% on a y/y unadjusted basis.
The main contributors to the increase in the first quarter were manufacturing with 2.2 percentage points; the finance, real estate and business services with 1.0 percentage point; the wholesale, retail, motor trade and accommodation industry with 0.5 of a percentage point; and the transport, storage and communication industry with 0.3 of a percentage point.
The construction industry contributed 0.0 of a percentage point for six consecutive quarters.
Gina Schoeman, senior economist at Absa Capital, said the figure was above the consensus forecast and, as expected, manufacturing added the most to first-quarter gross domestic product (GDP) numbers.
“It doesn’t change our view that monetary policy will start tightening in the first quarter of next year, simply because we think that although the manufacturing sector is recovering it is still not above pre-crisis levels. The construction sector also did not add anything to GDP in the first quarter which suggests that investment remains very slow,” she said.
The economy came out of recession in the third quarter of 2009 but the recovery has been sluggish, with high frequency data suggesting both consumer expenditure and output levels were still not at pre-recession levels.
Partly due to the slow recovery, the central bank has kept interest rates at 30-year lows this year, leaving the repo rate at 5.5% after cutting it by 650 basis points in the two years to December 2010.
The National Treasury expects growth at 3.4% for 2011, only a fraction of the 7% the government has said is needed to create jobs. The economy continued to shed jobs in the first quarter of this year, suggesting the government is going to have a hard time meeting its target of creating 5 million jobs by 2020.
