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Pretoria - South Africa’s economy grew by 4.4% in the fourth quarter of 2010 on a seasonally adjusted and annualised basis, compared with an upwardly revised 2.7% expansion in the third quarter, data showed on Tuesday.
On an unadjusted year-on-year basis, the economy expanded by 3.8% from a revised 2.7% in the third quarter.
A Reuters poll of 17 economists last week forecast a 4.2% acceleration in gross domestic product (GDP) growth in the fourth quarter on a seasonally adjusted and annualised basis, and a 3.5% rise on a year-on-year unadjusted basis.
Peter Attard Montalto, emerging market analyst at Nomura, said the the figure confirmed that interests rates would be kept on hold.
“Strong trade is showing through with strong agriculture being the main surprise for us. Retail is recovering but more slowly, whilst construction remains weak on the back of lacklustre domestic investment," he said.
“Overall we would say this would confirm rates left on hold and be a touch stronger than South African Reserve Bank (Sarb) was originally looking for. The economy is undergoing a continued recovery and the Sarb was likely too pessimistic about this through much of 2010.
“However, we can see the recovery is still uneven with trade strongest, then consumption and investment taking up the rear. That should come through however into the middle of this year, as low rates pass through and credit conditions start to relax.”
The economy came out of recession in the third quarter of 2009 and analysts say fourth-quarter GDP should reflect some traction in the recovery, after the third quarter number was depressed by labour strikes.
Data from the manufacturing and retail sectors showed positive growth in the last few months of 2010, boding well for the GDP figure.
The Reserve Bank has cut interest rates by a cumulative 650 basis points to a historical low of 5.5% since December 2008, in an attempt to boost growth.
On an unadjusted year-on-year basis, the economy expanded by 3.8% from a revised 2.7% in the third quarter.
A Reuters poll of 17 economists last week forecast a 4.2% acceleration in gross domestic product (GDP) growth in the fourth quarter on a seasonally adjusted and annualised basis, and a 3.5% rise on a year-on-year unadjusted basis.
Peter Attard Montalto, emerging market analyst at Nomura, said the the figure confirmed that interests rates would be kept on hold.
“Strong trade is showing through with strong agriculture being the main surprise for us. Retail is recovering but more slowly, whilst construction remains weak on the back of lacklustre domestic investment," he said.
“Overall we would say this would confirm rates left on hold and be a touch stronger than South African Reserve Bank (Sarb) was originally looking for. The economy is undergoing a continued recovery and the Sarb was likely too pessimistic about this through much of 2010.
“However, we can see the recovery is still uneven with trade strongest, then consumption and investment taking up the rear. That should come through however into the middle of this year, as low rates pass through and credit conditions start to relax.”
The economy came out of recession in the third quarter of 2009 and analysts say fourth-quarter GDP should reflect some traction in the recovery, after the third quarter number was depressed by labour strikes.
Data from the manufacturing and retail sectors showed positive growth in the last few months of 2010, boding well for the GDP figure.
The Reserve Bank has cut interest rates by a cumulative 650 basis points to a historical low of 5.5% since December 2008, in an attempt to boost growth.
