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South Africa's GDP slows to 0.2%

by Luyanda Makapela
on 26 Nov 2008
BuaNews Online
BuaNews Online

South Africa's economic growth rate has slowed to 0.2 percent in the third quarter of the year, compared to real annualised growth rates of 1.6 and 5.1 percent in the first and second quarters of the year, according to Statistics South Africa (Stats SA).

Statistician-General Pali Lehohla on Tuesday said the main contributors to the low growth in economic activity for the third quarter of 2008 were finance, real estate, business services and construction industries, among others.

"The contributions to the low growth in GDP by all other industries were either lower or negative that the aforementioned industries ... these include manufacturing, wholesale and trade, hotels and restaurants," said Mr Lehohla.

Economist at Econometrix Russell Lamberti of the news of a slowed GDP would put an end to predictions that South Africa was heading into a recession.

He further said that considering the GDP number, the South African Reserve Bank would most likely have to leave interest rates on hold in December.

"If the GDP number was not satisfactory, the SA Reserve Bank would probably have cut rates in December," Mr Lamberti told BuaNews.

The GDP figure remained positive in spite of the mining, manufacturing and retail sectors which were all under pressure while showing negative growth rates. Mr Lamberti noted that the construction sector remained positive.

The seasonally adjusted real annualised value added by the non-agricultural industries decreased by 0.1 percent during the third quarter of 2008, following annualised increases of 1.1 percent, revised from 1.5 percent, and 5.0 percent, revised from 4.7, during the first and second quarter of 2008 respectively.

This has resulted to the unadjusted real GDP at market prices for the first nine months of 2008 increased by 3.7 percent compared with the first nine months of 2007.

With regards to quarterly value added by industry, agriculture, forestry and fishing increased at an annualised rate of 16.1 percent during compared with the second quarter of 2008.

"The 16.1 percent increase can be attributed to positive contributions by field crops, horticulture and animal products," said the statistician-general.

He said the unadjusted real value added by agriculture, forestry and fishing during the first nine months of 2008 increased by 16.8 percent compared with the first nine months of 2007. -BuaNews

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