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Johannesburg - SA's real gross domestic product (GDP) increased by
4.6% quarter-on-quarter, seasonally adjusted and annualised in the first
quarter of this year, powered by a strong supply side and a recovery in the
demand side of the economy.
The Statistics SA figures showed that the largest
contribution to the growth of 4.6% was from the manufacturing industry,
which contributed 1.3 percentage points based on growth of 8.4%.
Mining had a stellar quarter, contributing 0.8% based on
growth of 15.4%, while the finance sector contributed 0.5 of a percentage point
based on growth of 2.5%.
The sector which includes retail contributed 0.4
percentage points based on growth of 3.3%, and government contributed 0.4% based
on growth of 2.8%.
Economists welcomed the figure, which was slightly higher
than consensus estimates for a 4.3% growth rate. It exceeded the 3.2% recorded in the fourth quarter of last year. However, they said growth
would lose momentum over the rest of the year, and a growth rate of 3% for the
year as a whole could be expected.
Standard Bank economist Danelee van Dyk said she was
heartened by the fact that the demand side of the economy had recovered.
"The recovery in the demand side should give growth legs. Growth can't
just be driven by the trade sectors such as manufacturing and mining. I'm not
confident that manufacturing and mining can continue at such high growth rates,
which should slow GDP growth down in future quarters."
She emphasised that growth was coming off a low base and
would be softer in the second half of the year. For the full year, she predicted
growth of 2.9%.
ETM economist Trevor Barsdorf said he was surprised by the
relatively strong growth in the financial services sector (finance, real estate
and business services contribute almost 23% to the size of the economy – the
biggest sector).
Retail also returned to growth. These trends showed that
interest rate cuts had helped the economy post a strong growth rate. He saw the
performance of mining as "impressive, but coming off a low base".
On
balance, Barsdorf expected a 3% growth rate was achievable, in line
with the International Monetary Fund's latest statements. The growth figure
should be good for the budget deficit, which in theory should augur well for
bonds. "However, everything is being overshadowed right now by the storm in
Europe," he said.
Nedbank economist Dennis Dykes said the country was likely
to see a quarter or two of good strong growth. "But how sustainable will
this be? There will be slower momentum after the 2010 FIFA World Cup." He predicted
3.1% growth for this year and a similar growth rate for next year. "That's
not a great performance," he said.
- Fin24.com