24 February 2010
South Africa’s gross domestic product (GDP) grew by 3.2% in the fourth quarter of 2009, exceeding market expectations. Together with economic growth of 0.9% in the third quarter, it signals that the country is out of its first recession in 17 years.
Contributing to the GDP figure, released by Statistics South Africa this week, was growth in the manufacturing sector (contributing 1.5 percentage points), general government services (1 percentage point) and construction.
Sectors that contributed negatively included wholesale, retail, motor trade, accommodation and agriculture.
Market expectations were that the economy would grow by 2.5% quarter-on-quarter.
Beating market expectations
Nedbank economist Carmen Altenkirch said: “It beat market expectations with manufacturing rising by 10.1 percent quarter on quarter. In contrast, domestic retail trade is lagging in the recovery because households are remaining cautious.”
Altenkirch added that the economy would gain momentum, with GDP accelerating in the first, second and third quarter of 2010.
Standard Bank economist Danelee van Dyk described the data as “encouraging”, but warned that this would not translate into massive job creation. “One should not be too optimistic that the figures will infuse new life into the labour market, the recovery is still tentative,” she said, though adding that there would be employment growth in some sectors.
“It is not all doom and gloom, but it is not an absolute booster of employment,” Van Dyk told BuaNews. She said 2010 would be the foundation year for the consolidation of the economy, adding that income growth would gain momentum in 2011.
Economy ‘remains vulnerable’
The South African Chamber of Commerce and Industry (SACCI) welcomed the improvement in figures, saying it had been its opinion that the recovery would be led by the manufacturing sector.
“This also reinforces the Department of Trade and Industry’s focus on manufacturing in its Industrial Policy Action Plan that was recently released for comment. However, the economy still remains vulnerable,” the chamber said.