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South Africa Economy Experiences Sharp Growth in Second Quarter

South Africa Economy Experiences Sharp Growth in Second Quarter

South Africa has received positive news as 2013 second quarter economic figures released Tuesday showed a climb reaching 3.o percent, the Business Recorder reported. First quarter GDP measured in at 0.9.  Increases in business services, the report suggested, contributed to the 1.7 percent economic boost within the manufacturing sector.

The continued decline of the country’s currency, labor conflict and slowed manufacturing production have contributed to a sluggish economic progression, according to the Business Recorder. Although in the second quarter South Africa has experienced a sharp leap, the climb, experts say isn’t quite steep enough.

“We wouldn’t expect this pace of growth to continue going forward, there are lots of headwinds at the moment, infrastructure constraints, policy uncertainty, and global demand is not all that strong,” Dennis Dykes, chief economist at Nedbank, said in the report. “The good news is that we’ve had some bounce back to more normalized conditions, obviously the outlook going forward is tainted.”

The Business Recorder also reported that the central bank has struggled with keeping both its interest rates low and output gap narrow. Due to increased inflation — stimulated by the weakening rand — South Africa’s central bank has broken it’s projected target band set between three and six percent.

“The Bank stands ready, as always, to act in whichever manner is deemed prudent, in line with its mandate, to ensure that inflation does not breach the upper end of the inflation band on a sustained basis,” Daniel Mminele, Deputy Governor said.

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Should inflation and unemployment remain high, the bank will work to influence improved economic structures across the nation. The Business Reporter noted that in 2012, South Africa’s GDP grew 2.5 percent.