'Positive GDP numbers‚ but many challenges'
Economic growth slowed in the first quarter of 2015‚ weighed down by sectors such as agriculture and mining.
Statistics SA gross domestic product (GDP) data showed on Tuesday that the economy expanded by a seasonally adjusted and annualised 1.3% in the first quarter of 2015 compared with 4.1% in the fourth quarter of 2014. Growth‚ however‚ accelerated by 2.1% year on year.
According to a median consensus forecast from a BDlive survey of 10 economists‚ GDP growth had been expected to slow to a seasonally adjusted and annualised 1.9%.
UFX.com managing director Dennis de Jong said Finance Minister Nhlanhla Nene would be pleased with the year-on-year GDP figures released on Tuesday‚ but the poor quarterly data would not allow him to get too carried away.
"The pan-African outlook is bright for the year ahead‚ but labour and electricity issues in SA will limit growth for the continent’s most advanced economy. Unemployment figures are still worryingly high‚ and the prospect of an imminent US interest rate rise may curb investment and weaken the rand. Despite the positive GDP figures‚ Nene still has many challenges to overcome‚" said Mr de Jong.
Stats SA said the largest contributions to the quarter-on-quarter growth of 1.3% were as follows: - the mining and quarrying industry contributed 0.8 of a percentage point based on growth of 10.2%; - finance‚ real estate and business services contributed 0.7 of a percentage point based on growth of 3.8%; and - the wholesale‚ retail and motor trade‚ catering and accommodation industry contributed 0.2 of a percentage point based on growth of 1.2%.
A leading indicator of economic activity released by the Reserve Bank on Tuesday suggested that economic growth would be weak over the next few months.
SA’s composite leading business economic indicator fell by 1.6% year on year in March 2015 after a 2.3% year on year decline in February.
The indicator decreased marginally by 0.2% month on month in March 2015. Five of the 10 component time series that were available for March 2015 decreased‚ while five increased
The largest negative contribution to the movement in the composite leading indicator in March came from a decrease in the number of residential building plans passed and a decrease in the US dollar based export commodity price index.
-RDM News Wire
